As insurance buyers and their brokers strive to better manage the total cost of risk, looking beyond the traditional focus on premiums plus policy terms and conditions to the technology used by insurers can offer financial advantages when managing claims.
After all, technology drives an insurer's ability to lower a policyholder's total cost of risk by delivering better claim results more efficiently. This benefits policyholders in the short run by lowering claim costs. It helps over the long term, as more efficient carriers can offer greater pricing flexibility.
In fact, controlling claims costs has never been more important. Despite falling frequency across almost every commercial insurance line, severity is rising. Today, most policyholders face fewer but more expensive claims. This may be starting to harden prices in some lines, such as workers' compensation.
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