Property/Casualty Claims Technology Strategies
Implementation of new claims technology has the potential to improve the Property/Casualty industry's combined ratio by up to 7 points, resulting in an industry-wide increase of $25 billion in underwriting profitability.
Although claims is a core Property/Casualty (P/C) insurance function, it is a surprisingly low-profile part of most insurers organizations. Claims have a major impact on an insurers financial results as well as on its reputation with customers, intermediaries, and regulators. New technologies and business practices are giving P/C insurers the ability to reduce losses and loss adjustment expenses considerably. These innovations, and their impact on costs, are profiled in Celent's latest report, .
"Improving the business process and technology environments for claims should be a high priority for P/C insurers," says senior analyst Donald Light, author of the report. "Doing claims right can have a significant impact on insurers' financial results and market positions - an impact which can match or exceed that of higher profile sales and service initiatives."
The report describes a best-practices approach to building a business case for claims initiatives. This approach stands the traditional, and over-used, IT-centric process on its head, says Light.
Celent estimates that, in 2004, claims initiatives will account for 17% of total P/C new project IT spending, or approximately US$600 million.
The report provides a way for insurers and technology vendors to analyze the impact of claims initiatives on the components of the loss ratio: frequency, severity, and loss adjustment expense. It also gives a comprehensive description of types of claims process and technology initiatives.
Celent describes three categories of claims technology enablers: core claims systems, "inner-ring components" (electronic content management, business process management, and business rules engines) and "outer-ring" tools (e.g., integration and contractor management tools). Examples of leading vendors in each category are given.
The report concludes with specific recommendations for insurers looking to implement a best-practices approach to claims technology strategy.
The 25 page report contains 9 figures and charts.
A is available online.
of Celent Communications' Property/Casualty research service can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].
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|San Francisco, CA, USA October 14, 2003|
P/C Claims Technology Strategies
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