Nine out of 10 property/casualty claim officers said increased
competition, consolidation and convergence are among the leading
challenges facing their industry in 2008, according to a recent Towers
Perrin survey conducted by the firm’s claim
management practice.
The claim officer survey also reported on key trends that are reshaping
the industry, citing the rapidly growing importance of data analysis and
technology, along with recruitment and retention of top talent, as key
determinants of meeting business goals. In fact, attracting and
retaining top talent is cited as the top priority for 82% of companies
surveyed.
“Claim officers are all too familiar with the
challenges of competitive pressures,” said
Kathleen Cullen, Towers Perrin’s claim
management practice leader. “Our survey looks
beyond traditional competition and provides excellent insight into the
emerging issues that are transforming the industry. The way the industry
traditionally looked at itself has shifted from budgets and operational
controls to a need for more sophisticated approaches regarding managing
claim performance and results.”
In all, 62 claim officers from property/casualty insurance companies of
various sizes were surveyed in late 2005: 37% from companies with less
than $200 million in written premiums, 31% from companies with written
premiums of between $200 million and $750 million, and 32% from firms
with more than $750 million in written premiums.
Both commercial and personal lines companies participated:
About half write a significant amount of business in commercial lines,
with approximately half of those describing multi-peril as their
primary line of business.
Within personal lines, about half of those participants write
predominantly auto coverage.
Expense and cost management remains a top concern for all carriers,
although better technology solutions and sophisticated analytics are
getting more emphasis as competition tightens.
Secondary challenges vary by respondent demographic with larger carriers
citing distribution and product management while smaller carriers and
carriers that write smaller accounts cited regulatory issues.
Regarding priorities, 52% of claim officers pointed to the effective use
of data and analytics as a main driver to meeting business objectives,
ranking it second to attracting talent. This was closely followed by an
interest in better ways to use technology in general (50%).
Focusing on the emerging trends and issues bringing change to the claims
industry, nearly two-thirds (65%) of respondents chose sophisticated
analytics, trumping the more traditional issue of escalating claim
severity, which was identified by 50% of respondents. Increasing
technology needs and reliance on software ranked as the number three
emerging issue.
Interestingly, less than a third of respondents cited increased business
acumen needs as an emerging issue — a notable
finding given that 68% identified technical skills and training as an
approach to meet industry challenges.
“Claim leaders are looking for technical
solutions to meet their increasingly complex business needs,”
explained Ms. Cullen. “It is clear that
investment in people and broader-based skill development is critical for
sustaining and improving claim-handling fundamentals.”
About Towers Perrin
Towers Perrin is a global professional services firm that helps
organizations improve performance through effective people, risk and
financial management. The firm provides innovative solutions in the
areas of human capital strategy, program design and management, and in
the areas of risk and capital management, reinsurance intermediary
services and actuarial consulting. Towers Perrin has offices and
alliance partners in the United States, Canada, Europe, Asia, Latin
America, South Africa, Australia and New Zealand. More information is
available at www.towersperrin.com.
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