NU Online News Service

U.S. property and casualty insurers intend to invest in claims technology over the next two years, mostly to ensure customer satisfaction, according to a Towers Perrin survey of claim officers.

The survey, Towers Perrin's third "Property & Casualty Claim Officer Survey," found that 92 percent of claim officers said they plan on making investments in technology over the next two years.

Respondents expressed multiple reasons for wanting to make improvements. Seventy-four percent of the officers said improving the customer experience is their main objective for making the investments, while 69 percent said improving cycle times and 66 percent cited bettering management information system and reporting capabilities, according to Towers Perrin.

"Carriers have specific objectives for making technology investments over the next two years which, in turn, support broader low cost and expense reduction goals," said Kathleen Cullen, Towers Perrin senior consultant and co-author of the survey report.

"Based on the findings, it's clear that carriers are making investments aimed at improving or replacing front-end and back-end claim systems--ultimately leading to improved bottom-line performance," said Cullen.

Respondents mentioned potential obstacles to advancing technology expenditures. The survey noted that competing intra-organizational priorities--including coping with the current economic crisis--are among the biggest hurdles to increasing claim departments' use of technology.

According to the survey, 70 percent of respondents mentioned "other initiatives taking priority" as the primary obstacle.

The survey also found that predictive modeling technology has not found a home in the claims arena as of yet, with only 14 percent of respondents reporting reaping high returns related to use of predictive modeling in their core claim operations. Towers Perrin said claims lag other areas such as pricing and underwriting with respect to predictive modeling.

Brian Stoll, Towers Perrin senior consultant and report co-author, said many companies' current systems and data are not sufficiently developed to support predictive modeling.

The survey, concluded in May, covered P&C claim officers' perspectives on how technology is being used to support core claim-handling operations and where investments are paying off, Towers Perrin said. Thirty-seven officers from small, medium and large companies participated.

Special Reports /

U.S. Insurers Plan Investments In Claims Technology, Survey Finds

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