Insurance Technology Featured Article

Novarica Report Claims that Personal Lines Carriers Invest as Market Softens

November 14, 2012

Karlyn Carnahan, a principal with Novarica and author of a recent report, stated that in initiatives that promote growth strategies, expense reduction, and improvements in underwriting results, they see personal lines carriers looking to invest, as the market continues to be soft.

“Business intelligence, policy, agent portals and connectivity, and claims are definitely key technology areas for these carriers to help confront stresses on profitability,” she added.

Particularly on the part of direct response companies, Novarica characterizes the market with high transaction volumes, intense price competition, high levels of advertising spending, and lastly, slow growth. Moreover, the report also provides recommendations on how carriers should begin projects in these areas.

For example, those looking to invest in business intelligence, before overlaying business intelligence tools such as a predictive analytics module or an organization that can provide pooled data and insights; they should first begin with data-quality initiatives.

To gain operational efficiencies and flexibility in its ability to add data, Novarica also suggests carriers upgrade their policy administration systems, which will eventually improve risk selection and risk pricing, and reduce operating expenses.

According to the report, as agents and carriers increasingly prefer to receive and provide information electronically, extending functionality to agents continues to be important as it helps to process it with as little human touch as possible.

The report cites widespread use of segmentation as restraining the cyclical nature of personal lines pricing, with auto pricing remaining fairly stable even as homeowner rates increase.

For private passenger auto of 100.3 percent for 2012, and 105.0 percent for homeowners, A.M. Best and the Insurance Information Institute forecast a combined ratio with considerable regional variation for homeowners dependent on local CAT activity.

To continue to respond to pressure on the combined ratio, Novarica concludes that, personal lines carriers are focusing on managing and improving customer retention, improving or just maintaining their market position, and reducing their expenses.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.




Edited by Brooke Neuman

Article comments powered by Disqus

Related Insurance Technology Articles

Optimal Blue partners with Arch Mortgage Insurance Company

According to the terms of the agreement, Optimal Blue will now provide Arch MI's competitive pricing and Rate Quote workflow within its eligibility and pricing services. Arch MI customers using Optimal Blue's services can now request for Arch MI's mortgage insurance premium rates for up to five loan products. [ Read More ]
08/29/2014

State Farm Makes Auto Claims Submission with Mobile Devices Easier

Unfortunately, we are all too familiar with the phrase, "accidents will happen!" Whether it is a fender-bender or a serious collision we have all been there and done that when it comes to capturing all of the information we need to submit a claim that insurance companies can easily and quickly process. To use another popular phrase, "It is a real pain in the neck." [ Read More ]
08/28/2014

Insurance Industry Increases Hiring for Technology Jobs

Insurance companies have lots of job opportunities for those with thecnology skills. [ Read More ]
08/28/2014

American National Insurance Company Selects iPipeline Solution

iPipeline, a company that offers on-demand marketing, selling, and processing solutions, recently announced that its AFFIRM for Annuities solution has been selected by American National Insurance Company, a provider of life and annuities products, to automate the advisor selling process. By supporting the customized workflows and streamlining the order-entry process, the solution allows financial institutions to meet their requirements for FINRA, SEC and state compliance. [ Read More ]
08/26/2014
FREE Insurance Technology enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!