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Insurer Insights from the EDGE Conference

October 15, 2014
 




A couple weeks ago I had the pleasure of attending the IASA Executive EDGE Conference in Chicago. The EDGE conference brings together insurance executives and industry experts to share key disciplines within the industry. Being a first time attendee, I was very impressed with the presenters and the industry insights that were shared. Here is a recollection of some of the valuable information presented.
 

 

Stuart Tainsky, Cr. VP and CIO of Privilege Underwriters Reciprocal Exchange (PURE) Insurance, a nominee for the Technology Innovation Award, had a very interesting presentation on increasing customer retention. PURE Insurance found that when one of their customers had gone through the claims process, their satisfaction rating was very high. However, there was a lower retention rate of customers if they had never been through a claims process. To increase customer satisfaction, PURE decided to make information on policies and claims as easily available as possible.

PURE’s solution was to create a member portal, treating customers as members and giving them access to information as it is happening. The self-service portal aggregates data from Guidewire Claim Center and One-Shield Dragon to a data warehouse, then integrates it into a cloud-based platform. PURE built the member portal on Salesforce.com to provide a transparent view of their policies, bills, and claim details. Members were able to see every communication and action that was occurring to resolve their claim. Members were also provided answers to the Top 10 commonly asked questions right on the homepage. These changes increased customer satisfaction and decreased the amount of inbound call center calls.
 

 

Another captivating presentation was from Brian P. Sullivan, a journalist and analyst covering financial services including the insurance industry for more than 30 years. His presentation “No Room for Dummies” spoke to the direction the industry should be heading, based on trends in technology, changing consumer demographics, and the economy.

Sullivan says, “The only insurers who won’t be able to survive the new world are stupid insurance companies.” So according to Sullivan, what constitutes a dummy?

His position is dummies still believe blocking and tackling is the competitive battleground. He stated that dummies will fail to build an enterprise-wide data/analytical powerhouse.

So here is what he said smart insurance companies will do:
  • Gather every bit of available data
  • Mine that data for insights
  • Turn those insights into actionable ideas
  • Put those ideas into action
  • And make this happen at every level of the enterprise

So how do insurers really make “big data” work to their advantage? The single biggest barrier to creating an enterprise-wide data/analytic powerhouse is an inflexible infrastructure. However, policy, claims, and document management tools are bringing modern systems to smaller insurers, leveling the playing field. Since these tools are available, why aren’t all insurers rushing to modernize their systems? A big hurdle to implementing these systems can come from an internal challenge. There can be a disconnect between IT managers and business leaders. To bring these teams together tech needs to empower business leadership to make the decision, but it is tech’s responsibility to lead the way.

Here are some additional revolutions happening in our economy and society that profoundly raise the stakes, separating the strong from the weak insurers.
  • Demographic shifts are bigger than any seen for a century.
  • The biggest property and casualty insurance product, auto insurance, is shrinking in a way that will rattle all other personal lines, commercial lines, life and even health insurance.

The single biggest factor impacting auto insurance rates is that the number of accidents per year continues to fall. Personal auto is 9% smaller than a decade ago (adjusted for inflation). Thanks to accident avoidance technology that will be supercharged by autonomous vehicles, this trend is not going to change.

How will this change the industry? With continued shrinking in personal auto, well-capitalized giants will need to find other products to fill the pipeline. Every insurer will want more small commercial, more specialty lines, and will need to sell more life insurance, investment products, and health insurance.

What about those demographic changes? Here are the four big challenges:
  • Generation Y Millennials will overwhelm all other considerations because there are more of them than Generation X. Many Generation Y’s live a different lifestyle - live in urban areas, are car free, and are not homeowners. Insurers need to adjust polices to grab this market, because as they get older, they will be the largest amount of consumers.
  • Baby Boomer’s vast life change is an unmatched opportunity. Boomer financial needs will shift significantly. Even those with high cash flows will struggle to retire.
  • Insurers need to focus on marketing to women. Over 50% of all US households are head by women. And there are over 5 million more US women with a college degree. Women are now the decision makers.

Overall, I felt that the common message from the presenters at the EDGE conference is that insurers now more than ever need to be ready for change. The consumer base is shifting their expectations, wanting more visibility, better communications, and policies that are suited for their lifestyle. The smart insurers will utilize the tools available to find out what their customers really want and will be successful. Those who don’t adapt to their customers needs will be left behind.

GhostDraft Customer Communications Management (CCM) software can help your business users produce relevant, clear, and compliant customer documents, that can easily be integrated into your current policy admin system. GhostDraft can help bring your company that change your current and future customers are demanding. If you would like to see a short demo of GhostDraft, click here now or call 484-879-4100.
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