New research shows 53% of insurance executives believe there are ‘huge’ opportunities for change
More than half (53%) of insurance industry executives believe there are “huge” opportunities for insurers to improve efficiencies and cut costs, but only one-third (31%) believe insurers will do so over the next three to five years.
These are the findings of a study of more than 150 insurance industry executives and intermediaries by information management firm EDM Group.
Almost two-thirds (64%) of respondents to the survey believe that the biggest opportunities for increasing efficiencies are with back office administration, with 41% identifying the customer retention function as also ripe for change. Other areas highlighted are underwriting (25%), distribution (19%) and claims (18%).
EDM Group head of insurance sector Craig Campbell said: “Cost management and efficiency are two of the biggest challenges for the insurance market. One of the most effective ways to manage both of these issues is the digitisation of information, which helps not just with costs and better efficiency but also in the delivery of best practice regulatory compliance and new business opportunities. Information is at the heart of any insurance firm but all too often information such as customer records is not held in the most effective formats.
According to EDM Group’s research, only 17% of insurance professionals believe that the quality of data and information held by insurers will improve “dramatically” over the next three to five years, with 50% thinking it will improve “slightly”. Moreover, only 1% said the quality of data and information held by insurance companies was “excellent”, with one-fifth (21%) believing it to be “good”.
“The next three to five years will be critical in the evolution of the insurance industry, and the hope is that many firms will continue to look at efficiencies as a key way to differentiate themselves in the market and gain a competitive advantage,” Campbell said.