NU Online News Service

U.S. property and casualty insurers intend to invest in claimstechnology over the next two years, mostly to ensure customersatisfaction, according to a Towers Perrin survey of claimofficers.

The survey, Towers Perrin's third "Property & Casualty ClaimOfficer Survey," found that 92 percent of claim officers said theyplan on making investments in technology over the next twoyears.

Respondents expressed multiple reasons for wanting to makeimprovements. Seventy-four percent of the officers said improvingthe customer experience is their main objective for making theinvestments, while 69 percent said improving cycle times and 66percent cited bettering management information system and reportingcapabilities, according to Towers Perrin.

"Carriers have specific objectives for making technologyinvestments over the next two years which, in turn, support broaderlow cost and expense reduction goals," said Kathleen Cullen, TowersPerrin senior consultant and co-author of the survey report.

"Based on the findings, it's clear that carriers are makinginvestments aimed at improving or replacing front-end and back-endclaim systems--ultimately leading to improved bottom-lineperformance," said Cullen.

Respondents mentioned potential obstacles to advancingtechnology expenditures. The survey noted that competingintra-organizational priorities--including coping with the currenteconomic crisis--are among the biggest hurdles to increasing claimdepartments' use of technology.

According to the survey, 70 percent of respondents mentioned"other initiatives taking priority" as the primary obstacle.

The survey also found that predictive modeling technology hasnot found a home in the claims arena as of yet, with only 14percent of respondents reporting reaping high returns related touse of predictive modeling in their core claim operations. TowersPerrin said claims lag other areas such as pricing and underwritingwith respect to predictive modeling.

Brian Stoll, Towers Perrin senior consultant and reportco-author, said many companies' current systems and data are notsufficiently developed to support predictive modeling.

The survey, concluded in May, covered P&C claim officers'perspectives on how technology is being used to support coreclaim-handling operations and where investments are paying off,Towers Perrin said. Thirty-seven officers from small, medium andlarge companies participated.