Today I published the latest report in our Business and Technology Trends series, Specialty Lines Insurers. Like other reports I’ve published on reinsurance, workers comp, commercial lines and personal lines, the report is based on surveys and conversations with members of the Novarica Insurance Technology Research Council, as well as a review of secondary published sources.
The report provides an overview of specialty carriers business and technology issues, data about the marketplace, and over 30 examples of recent technology investments by specialty insurers. Specialty insurance include a wide variety of insurance types, all of which share the fact that they are typically not written through standard markets. I looked at insurers’ internal application infrastructures across different systems types, including front-end, core, document, business intelligence, back-end, and CRM/specialized components. The full report includes a nuanced discussion of the top issues related to each area, but from the data, I see five technology priorities emerging overall:
1. Connectivity: Extending functionality to the agents is only increasingly in importance, as both agents and carriers would prefer to receive and provide information electronically and process that information with as little human touch as possible.
2. Policy: Specialty lines insurers should consider upgrading their policy admin systems to improve product development flexibility to enter profitable niches.
3. Claims: If a carrier hasn’t already begun to upgrade their claims administration system, now is the time to start. Carriers who are using modern systems are rapidly gaining competitive advantages.
4. Distribution: In a highly competitive market, specialty carriers need to extend channels, appoint new agents, and optimize their current distribution model to drive more revenue.
5. Business Intelligence and Modeling Tools: With a book of high risk, high limit accounts, use of modeling and mapping tools are critical to price and manage the book—particularly catastrophe exposures.