In the face of increasing profitability pressures perpetuated byhighly competitive marketplace conditions, personal lines insurersare sharpening their focus on business intelligence, policyadministration system replacement, portal functionality, and claimssystems replacement, according to a report released by the researchand advisory firm Novarica.

The report, Business and Technology Trends: PersonalLines, includes data on the marketplace and over 30 examplesof recent technology investments by personal lines insurers, inaddition to an overview of personal carriers' business andtechnology issues.

“As the market continues to be soft, we are seeing personallines carriers looking to invest in initiatives that promote growthstrategies, expense reduction, and improvements in underwritingresults,” says Karlyn Carnahan, a Principal with Novarica andauthor of the report. “Business intelligence, policy, agent portalsand connectivity, and claims are definitely key technology areasfor these carriers to help confront stresses on profitability.”

The report also discusses the issues and approaches carriersmust consider when beginning projects in these areas. Those lookingto invest in business intelligence, for example, should start withdata-quality initiatives, and then overlay a business intelligencetool such as a predictive analytics module or an organization thatcan provide pooled data and insights.

Carriers should also consider upgrading their policyadministration systems to gain operational efficiencies andflexibility in their ability to add data—which will in turn improverisk selection and risk pricing, and reduce operating expenses.Extending functionality to agents continues to be important, asagents and carriers increasingly prefer to receive and provideinformation electronically and process it with as little humantouch as possible.

Lastly, insurers should automate claims processes to speed upclaims service, which will provide consistent and fair bestpractices to all customers.

In addition to these recommendations, the report includes anoverview of the personal lines marketplace, a summary of theinsurer landscape, and a discussion of the top core applicationissues with examples of projects insurers have recently initiatedin this area.

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