Insurance Industry News from ProgramBusiness.comSurvey On Technology
NEW YORK--Prior to last month's tragic events, a Tillinghast - Towers Perrin survey revealed that insurers now believe technology will drive significant industry change. In fact, despite an already reeling new economy and technology investments that have delivered mixed results, many insurers believe that over the next three years technology-driven change will be revolutionary. Insurers' response to last month's tragedy may put much of this new technology to the test earlier than anyone believed.
The survey was the first in a series of industry ``pulse'' surveys conducted by Tillinghast - Towers Perrin, the worldwide management and actuarial consulting firm. Insurers composed the overwhelming majority of respondents in this first survey, which draws from the 248 North American financial services companies participating in the Tillinghast e-Track program.
``Ninety-one percent of respondents now believe dramatic change is on the horizon,'' said Jenny Emery, Tillinghast's global e-business leader. ``A third called the change revolutionary. These are not the self-serving predictions of consultants or tech sector gurus. These are historically pragmatic insurance company executives, who do not embrace change lightly.''
Fidelity and Schwab Emerge as Industry Models
Citing financial services stalwarts like Fidelity and Schwab as their models, respondents created a picture of how their industry has changed over the past three years. Most believe that new technologies have heightened the strategic importance of ``owning'' the customer relationship (75%), creating profitable business partnerships (76%), and bringing innovative products to market (65%).
As if to confirm that belief, the 20% of companies that view themselves as ahead of the rest of the industry in implementing new technologies tended to report considerably more progress in related areas than other respondents -- as well as more optimism about the changes yet to come.
As opposed to those who view themselves as slow to adapt, those who perceive themselves as leaders already report that they've made significant progress in using new technology to enhance and support existing distribution channels (64% vs. 18%), improve new business processing (55% vs. 23%) and enhance customer service (55% vs. 36%).
Owning the Customer Relationship - The focus on both customer service and distribution channel support demonstrates that insurers have begun to put the customer -- both intermediary and end-consumer -- front and center. In Tillinghast - Towers Perrin's work identifying best practices in distribution for the financial services industry, this intense customer focus has emerged as a consistent theme.
``It is heartening to know industry leaders have moved beyond the Web as a distribution channel, alone. They seem to be concentrating on using the Internet to work more effectively with their agents and brokers, perhaps by tapping customer information and using it to make these business partners more successful,'' said Emery.
Whence Product Innovation? - The belief in the increasing importance of bringing innovative products to market must be reconciled with the finding that less than 20% of the respondents made improving underwriting, pricing, and products their first investment priority. Rather, distribution was clearly priority one for many insurers. Strikingly, those that describe themselves as industry leaders -- and those who hold senior management titles -- tend to make underwriting, pricing, and products a higher investment priority over the next three years than their industry counterparts.
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