There is no more competitive market in the insurance world than personal lines. We don’t need any more examples of this than the amount of time we spend watching advertisements on television for our favorite insurers.
The list of top 10 personal auto insurers by percentage of the market might very well match up with the amount of dollars spent on advertising. Our friends at Highline Data report that 2010’s top 10 in percent of the market include: State Farm, 18.1 percent; Allstate, 10.4 percent; Berkshire Hathaway, 8.6 percent; Progressive, 7.8 percent; Zurich, 6.1 percent; Liberty Mutual 4.6 percent; USAA, 4.4 percent; Nationwide, 4.3 percent; Travelers, 2.1 percent; and American Family, 2.0 percent.
The major carriers dominate the market like no other line, but smaller carriers have learned that technology is the great equalizer. Anyone—with the right tools available—can compete with the top tier insurers.
Novarica’s Karlyn Carnahan recently published a research report (Business and Technology Trends: Personal Lines) and she listed the top technology priorities for personal lines insurers:
- Extending functionality to the agents.
- Upgrading your policy administration system to gain operational efficiencies and flexibility.
- Business intelligence through a data-quality initiative.
- Streamlining claims management by automating processes to improve customer service.
It is interesting that, considering the growth of the direct channels, Carnahan would list agent functionality at the top of the list, but the other priorities are hardly surprising for personal lines or any other line of business. Those with the best systems do well in competing with major carriers no matter what their advertising budget is.
Carnahan also listed the top business priorities for personal lines insurers in her research report:
- Consistent application of underwriting guidelines and discipline by utilizing business rules based on predictive models.
- Speed-to-market for new products and maintenance of ongoing products.
- Increasing the efficiency and consistency of the underwriting process by adding workflows with automatic task generation and by integrating third-party data sources to improve accuracy and speed.