Specialty insurers increasing technology investment: Study
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The changing business composition of the insurance market is driving technology investment by insurers in that market, a report issued by New York-based insurance advisory firm Novarica on Tuesday finds.
The report, “Business and Technology Trends: Specialty Lines Insurers,” says that current market conditions are prompting many specialty insurers to focus investments on technologies that facilitate growth, expense reduction and improved operational effectiveness.
Accordingly, the report — based on conversations with members of the Novarica Insurance Technology Research Council and a limited survey of specialty insurers — finds policy administration systems replacement, rating engines, business intelligence and claim systems replacement among the top investment initiatives for specialty carriers.
“With the ability to accommodate a wide variety of risks, the specialty market requires a significant amount of operational flexibility to meet the needs of the insurer and the insured,” the report states.
Moreover, as standard lines insurers exit from exposed property catastrophe risks in the wake of Superstorm Sandy and other catastrophes, specialty lines insurers looking to take advantage of that business will need to concentrate on improving the technology that supports underwriting, Novarica finds.
“As the book continues to shift to higher-hazard business, specialty carriers have to become even more focused on proper pricing and delivering true underwriting expertise for highly unique accounts,” according to the report. “Acquisition and storage of detailed, structured and unstructured, risk data across core systems is a key priority to specialty insurers to enable better underwriting and pricing.”
A summary of the report is available here.
