"As personal lines become increasinglysegmented and competitive, carriers will need highly digitizedprocesses, advanced analytic capabilities, and an effectivedistribution strategy to succeed," said Chuck Ruzicka ofNovarica.

From chatbots to instant quotes, insurers have long been at theforefront of the insurance community when it comes to digitizationand technology. Aimed at making the insurance process moreefficient and user-friendly for agents and consumers, personallines insurers, particularly, have focused on technology in order to gain an edge in a highlycompetitive marketplace.

"As personal lines become increasingly segmented andcompetitive, carriers will need highly digitized processes,advanced analytic capabilities, and an effective distributionstrategy to succeed," Chuck Ruzicka, vice president of research andconsulting of Novarica, said in a news release. Ruzicka is also theauthor of Novarica's new report, "Personal Lines: Near-Terms andLong-Term Technology Trends," which explores the future of personallines over the next few years with a focus on the role oftechnology.

Technology is essential to creating sales, risk management,customer service and cost advantages for nearly every business,especially for personal lines.

According to Ruzicka, carriers can future-proof their business strategies byenhancing specific technological capabilities, such as:

• Developing highly digitizedprocesses: Both auto and homeowners insurers arelooking for opportunities to offer more self-service capabilitiesto their agents and policyholders. Many digital investments arelooking to provide customers with more transparency. For instance,auto insurers could offer an integrated scheduling servicefor rental cars and towing companies; homeownersinsurers could connect policyholders with a marketplace ofapproved local vendors.
• Strengthening analyticcapabilities: Many insurers are likelyto augment their consumption of third-party data to strengthenmarketing campaigns, increase underwriting discipline and improvefraud detection. This may include the consumption of pre-scoreddata in the short-term. Also, insurers should strive tobenchmark their analytic capabilities against online retailers likeAmazon.
• Refining their distributionstrategy: Insurers may elect to partnerwith other insurers, associations or industry partners to accessnew pools of potential clients. For instance, some smaller insurersmay choose to segment their business strategy to focus solely onproduct manufacturing and partner with a national carrier fordistribution.

"Carriers should wisely invest in technology, selectingcarefully from the variety of emerging technologies available.Successful companies will think longer term and develop strategiesto address these predictable market changes," he said.

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