Faced with the continuation of a soft market in 2010, 93 percent of insurance carriers surveyed by IVANS, Inc., are increasing their investment in automation technologies to improve operational efficiency.

Adoption of technologies that streamline transactions between insurance carriers and agents will continue to grow in 2010, according to IVANS, as carriers look for ways to maintain profitability in a sluggish economy.

"Insurance carriers are shoring up operations and focusing on investments that help them do more with less," says Clare DeNicola, president and CEO of IVANS. "In large part, property/casualty insurance carriers reasonably weathered the economic turmoil of 2009 because they stuck to their core businesses. The industry will continue to be under intense financial scrutiny and, most likely, greater regulatory scrutiny, so the markets will look to carriers to make strategic investments that build on existing strengths vs. breaking completely new ground."

Property/casualty carriers plan to invest more resources within existing lines of business (cited by 82 percent of respondents) as opposed to diversifying their product portfolio across lines of business (41 percent) in 2010. In addition, the survey indicated carriers are focusing on keeping their existing customers satisfied. Seventy-four percent of carriers are investing in tools that help them better understand and respond to their customers.

While 41 percent of carriers that participated in the IVANS survey are expecting to increase their technology budget for 2010, carriers also noted three challenges to achieving their business objectives:

  • Competing priorities (91 percent of respondents)
  • Lack of staff (78 percent)
  • Need to update technology infrastructure (67 percent)

"Like most organizations, carriers are working with finite resources and want to invest in projects that will have the greatest impact on their business," says DeNicola. "Carriers realize they need to make technology investments to generate operational leverage and efficiency."

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