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

Mercury Insurance Selects OnBase for Process Automation and Paperless Workflow

One of the greatest benefits of digital technology is it allows businesses to eliminate processes and methodologies that in the past slowed growth and made up a considerable percentage of the overall operational cost of the organization. While paper has served civilization very well, and still continues to do so to this day, for large organizations it is a technology that can be described as slowing down the workflow of a company to a tortoise pace compared to digital solutions. [ Read More ]
10/30/2014

Insurance Industry Focusing More on Customer Satisfaction

Like any other industry, customer satisfaction matters a great deal in the insurance sector. Various studies conducted have proven beyond any doubt that a satisfied customer is the best advertisement for an insurance company. [ Read More ]
10/29/2014

Parents Choose Doctors for Children Based on Online Ratings

New research recently published in the Pediatrics journal shows that the online reputation of a healthcare provider may be just as important or even more so as its real-life one. [ Read More ]
10/28/2014

Auto Insurance Telematics Poised for Explosive Growth

Smart cars are getting smarter and have become foundational elements of our increasingly connected world. The data they generate pertaining to things like driver habits, the car condition and adherence to maintenance best practices, where the car is driven, where it calls home, etc. are all critical in determining insurance premiums. In fact, they are what will enable insurers the ability to reward customers who are good drivers and good owners while charging higher rates for those who are less … [ Read More ]
10/23/2014
FREE Insurance Technology enewslettter.

Events

Weekly Live Demo
Contact Center Solutions

Register Today!