From chatbots to instant quotes, insurers have long been at the forefront of the insurance community when it comes to digitalization and technology. Aimed at making the insurance process more efficient and user-friendly for agents and consumers, personal lines insurers, particularly, have focused on technology in order to gain an edge in a highly competitive marketplace.
“As personal lines become increasingly segmented and competitive, carriers will need highly digitized processes, advanced analytic capabilities, and an effective distribution strategy to succeed,” Chuck Ruzicka, vice president of research and consulting of Novarica, said in a news release. Ruzicka is also the author of Novarica’s new report, “Personal Lines: Near-Terms and Long-Term Technology Trends,” which explores the future of personal lines over the next few years with a focus on the role of technology.
Technology is essential to creating sales, risk management, customer service and cost advantages for nearly every business, especially for personal lines.
According to Ruzicka, carriers can future-proof their business strategies by enhancing specific technological capabilities, such as:
- Developing highly digitized processes: Both auto and homeowners insurers are looking for opportunities to offer more self-service capabilities to their agents and policyholders. Many digital investments are looking to provide customers with more transparency. For instance, auto insurers could offer an integrated scheduling service for rental cars and towing companies; homeowners insurers could connect policyholders with a marketplace of approved local vendors.
- Strengthening analytic capabilities: Many insurers are likely to augment their consumption of third-party data to strengthen marketing campaigns, increase underwriting discipline and improve fraud detection. This may include the consumption of pre-scored data in the short-term. Also, insurers should strive to benchmark their analytic capabilities against online retailers like Amazon.
- Refining their distribution strategy: Insurers may elect to partner with other insurers, associations or industry partners to access new pools of potential clients. For instance, some smaller insurers may choose to segment their business strategy to focus solely on product manufacturing and partner with a national carrier for distribution.
“Carriers should wisely invest in technology, selecting carefully from the variety of emerging technologies available. Successful companies will think longer term and develop strategies to address these predictable market changes,” he said.
Article By: Heather Turner
Source: Property Casualty 360