Service and sales. If there are two business segments that continue to drive the insurance industry, its those. And whether it is life insurance or P&C, Forrester Research senior analyst Todd Eyler (www.forrester.com) believes its technology that will drive changes in those areas through the rest of 2002.
Eyler and Forrester made five specific predictions for 2002.
1. Life insurers move to plug-and-play.
According to Eyler, life insurers are looking to move to plug-and-play solutions to connect them with thousands of third-party financial advisors such as Merrill Lunchand to lower their implementation costs, too. Products from technology companies such as G2X and ChannelWave Software are easy for carriers to deploy, and they offer deeper functionality and a smarter business model.
ChannelWave offers a J2EE- and XML-based platform thats independent of the legacy platform and database. The result, Eyler says: New functionality can be achieved quicker and at a lower overall cost. That fast (and measurable) ROI is appealing to customers. And G2Xs product, Agility, is also on a J2EE platform; it avoids the Achilles hell of many CRM products by not giving in to mission creep and trying to address the needs of too many kinds of users. Such complex solutions take users away from their principle job: managing relationships.
2. HSBC will solve the bank/life insurance puzzle.
London-based HSBC Holdings is going to jump the divider between banking and life insurance, and will begin to sell life insurance products through its banks. That will meant that insurers who want to have their policies sold in other financial-services settings need to make their permanent and term policies as simple as possible so that sales can be automated, Eyler said. Young agents will be leaving life agencies for banks armed only with sales scripts from companies such as Wealth2K.com.
Their worst nightmare is the inability to answer questions about the policy, Eyler said. Applications from companies that offer real-time updates, such as Data Executives International, give a dashboard view to see the status of the policy, Eyler said.
3. LabOne will go outside ACORD to drive XML adoption by carriers.
Although Eyler praised ACORDs work to drive straight-through processing, he said the standards organization has not gone far enough. Health data for life insurers has not been standardized with XML, and Eyler thinks LabOne will create its own XML forms.
[Lab One] has an open approach to aggregating the data, Eyler said. I wouldnt be surprised to see a carrier work with it on this. Such forms would enable carriers to verify health data in days instead of weeks.
Which carrier would that be? Eyler mentioned John Hancock Financial Services as a possibility. [Its] a real innovator in the market, he said.
4. ComparisonMarket and Fusura will give online auto insurance sales new life.
Eyler does not see the countrys top auto insurers turning over part of their business to aggregators. Thats where ComparisonMarket and Fusura come in. Calling them industry versions of InsWeb, he said that they dont require insurers to commit to the big upfront investment that other aggregators have required. They can justify the spending, Eyler explained.
AIG, Kemper, and Prudential Financial Services are involved with Fusura. ComparisonMarket licensed its comparative shopping software from Progressive, which became a partner in the company, and received a $12 million boost in January from Allmerica Financial, Hartford Life Insurance, Liberty Mutual, and Travelers. The company provides automobile quotes for banks and other financial services companies.
5. P&C insurers will outsource their claims processing.
Eyler said claims processing will continue to attract the attention of property/casualty insurers. During tough times, he explained, all companies look to reduce expenses, and claims are by far the leading expense for P&C insurers.
He believes more insurers will use online claims intermediaries such as Mitchell, eAutoClaims.com, and Visibillity. Insurers want a little more control over the claims process, but they dont want to do it themselves, Eyler said. The intermediaries can monitor large networks of claims suppliers, and collect data about best practices. Collecting output data after claims have been resolved will enable the carriers to improve performance in succeeding claims.
click here:
ACORD: www.acord.org
ChannelWave: www.channelwave.com
ComparisonMarket: www.comparisonmarket.com
eAutoClaims.com: www.eautoclaims.com
Forrester Research: www.forrester.com
Fusura: www.fusura.com
G2X: www.g2x.com
LabOne: www.labone.com
Mitchell International: www.mitchell.com
Siebel: www.siebel.com
Wealth2K.com: www.wealth2k.com
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