Adaptability, Speed to Market, Customer Service Top Insurers’ Concerns, According to Oracle Insurance and Insurance Networking News Research
Insurers Seek Greater Business Agility but Face IT Challenges that Hinder Efforts to Meet Business Goals
ACORD LOMA – San Diego, Calif. – May 23, 2011
Insurers struggle with business agility and see their legacy IT systems as a hurdle to optimizing customer service and faster time to market for new products and channels, according to a study released today by Oracle Insurance and Insurance Networking News.
The study of 421 insurance industry professionals – including C-level and senior executives, IT professionals and line of business managers – looked at organizational priorities for insurers, their effectiveness in priority areas, and the role that IT plays in helping and hindering their initiatives.
Respondents, when rating their company’s effectiveness, scored their organizations lowest in areas that require significant agility – including the ability to outpace competitors in delivering products to market, improving the efficiency of customer service, expanding and optimizing distribution channels and streamlining policy processing.
Insurers rated themselves as least effective in outpacing the competition in delivering products to market, with nearly half of all respondents (48 percent) saying that their organizations were not at all effective, not very effective or only somewhat effective in this area.
Insurers feel hindered by current technologies in their efforts to deliver efficient customer service, and to introduce new products as quickly as they’d like.
Sixty-one percent of respondents indicated that they could deliver more efficient and faster service if they were not limited by their current IT environment, and 52 percent indicated that they could provide expanded self-service options.
Thirty percent of respondents said they would introduce new products quarterly if technology limitations were not holding them back, and nearly one-quarter (23 percent) indicated that annually would be their ideal.
Approximately 30 percent of respondents said that improved IT could drive improvement in each of the following areas: providing better, more competitive insurance products; expanding mobile service options; and enabling more accurate communication.
Approximately one-third (31 percent) of respondents said that modernizing existing IT systems over the next few years would be their single greatest IT challenge, followed by associated core system replacement (19 percent).
Insurers rated their performance highest in areas related to regulation and structured communication, such as managing business risk, ensuring channel compliance with company policies, making their business transparent to management and regulators and delivering a consistent message to customers, channels and shareholders.
Respondents indicated that they perform best in managing business risk, with 72 percent of respondents rating their organization as either very effective or highly effective in this area.
"The Oracle and Insurance Networking News study provides statistical validation of what we’ve been hearing from our customers since the launch of Oracle Insurance. This research underscores the challenges that insurers continue to face with legacy technologies, and highlights the areas in which insurance companies feel they could do better, if only they had the right technology in place. At Oracle, we’re providing adaptive, rules-driven systems that help insurers quickly reconfigure their business processes when needed – not six months down the road. This ability to adapt quickly helps insurers get products to market faster, make customer service more efficient, and meet their overall business goals,” said Chuck Johnston, vice president, Industry Strategy, Oracle Insurance.
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