Blog

7 Factors Driving Change for P&C Insurers

Rod Travers
Insurance Experts' Forum, April 2, 2014

The insurance industry has a reputation for being cautious about change. Sometimes thatís a good thing, especially when it comes to prudently managing risk. But the process of adaptation can be a detrimentally slow process for some insurers, especially in the face of a changing competitive landscape and ever-higher consumer expectations.

Nolanís latest P&C industry survey tells us that insurance executives are keenly aware of the factors driving change in the industry. Their responses reveal opportunities, challenges and trends in the areas of claims, underwriting, technology, social media, contact centers and organizational maturity:

  1. Economic growth is gradual with low interest rates putting focus on underwriting discipline, loss and expense management, retention and growth acceleration
  2. Competitive market conditions, coupled with favorable pricing trends, are emphasizing the question of how much rate is sustainable in the marketplace
  3. Managing balance sheet impact is becoming increasingly complex as leaders navigate the adverse effects of major catastrophes
  4. Technology continues to advance rapidly, and with it demand for capital investment.
  5. Reduction in claims loss costs and loss adjustment expense, as well as improvement in reserve management practices, are offsetting low investment returns
  6. Mastery of analytics, data mining and predictive modeling can create significant competitive advantages
  7. Social media in claims, underwriting, marketing and servicing continues to evolve, but the payback is unclear

The senior insurance executives who responded to the Nolan survey are cautiously optimistic about the evolution of the industry and, for the most part, the ability of their companies to respond. Their responses indicate that the tumultuous business climate we all face today is becoming the new normal.

The next several installments of Nolanís contributions to this blog will contain a more detailed review of the survey responses in the areas of claims, underwriting, technology, social media, contact centers and organizational maturity. Stay tuned.

Rod Travers is EVPat†The Robert E. Nolan Co., a management consulting firm specializing in the insurance industry.†Robert E. Nolan Executive Director Ben DiSylvester also contributed to this blog post.

Readers are encouraged to respond to Rod using the ďAdd Your CommentsĒ box below.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

To Quantify or Not — That is the Question with Modernization

Making the quantitative case is a long-practiced ritual in many insurance organizations.

3 Reasons DevOps Matters

Every insurer needs to compete on products and information turned around in light-speed fashion.

Coordinate Coverages to Manage Social Media Exposures

The bottom line is that no one policy will cover all the exposures in the social media realm.

The Internet of Things: Helping Insurers Make Better-Informed Decisions about Risk

The IoT is a major game changer for the insurance industry, and will likely affect every part of the insurance value chain. After all, insurance is data-driven, and thatís exactly what the IoT can deliverórelevant, actionable, real-time data that can provide an accurate picture of what is beingóor may beóinsured.

Software-Defined Everything

What does it take to virtualize all the key components in your data center?

On Thanking the Regulator … Really

The Financial Conduct Authority is demanding higher standards of consumer protection from insurers, which could lead to greater customer engagement and understanding.

Advertisement

Advertisement