In the competitive commercial-lines space, technology is becoming an increasingly important part of insurers' efforts to attract, retain and serve clients, says insurance research and advisory firm Novarica.

As commercial insurers continue to make investments in key technology systems, Novarica analyzed where these carriers are spending most of their dollars. Following are the four top technology priorities for commercial insurers, according to Novarica research, followed by a list of carriers' lower-priority initiatives.

Business Intelligence

Carriers are investing in business-intelligence tools with an ultimate eye toward using models to improve underwriting insights, claims activities and to apply more consistent pricing, according to Novarica. The firm says many commercial-lines insurers have existing reporting and analysis capabilities in place, such as packaged solutions. But, Novarica adds, “Carriers are starting to produce more complex data-analysis models and enhance their ability to look at multi-dimensional data to the business units.”

Priorities:

• “The ability to gather, store and retrieve the appropriate data elements neeed to gain insights by improving data models—including data warehouses, operational data store (ODS) and datamarts.
• “With increasingly sophisticated models, the ability for the business to use reporting tools to look at multidimensional data.
• “Carriers are increasingly using external providers for data or data analytics. These components may include estimating tools or may come with a data-pooling feature allowing smaller carriers to piggyback off the data of others. Some carriers are also utilizing analytical services. Data is provided to the vendor who then performs a service such as fraud analysis or compliance reporting.”

Core Policy Administration Systems

Commercial insurers are investing in modern policy-administration systems as they seek to rapidly implement product changes—particularly ISO changes, Novarica says. Vendors are responding to insurers' demands by offering ISO-maintenance services.