Nearly 90 percent of insurance carriers have not fully developed and executed their operations modernization strategy, and none have fully executed it according to Modernizing Insurance Operations report
BOSTON, November 17, 2022--Insurers have prioritized modernization but are struggling to do it according to Modernizing Insurance Operations, a study published today by Earnix, a global provider of mission-critical composable and cloud-based intelligent solutions across pricing and product personalization for insurers and banks. The survey of nearly 300 executives from insurance carriers focused on perceptions, priorities, and plans related to new technology adoption.
Operations modernization was listed as one of the top five organizational priorities for 87 percent of surveyed insurance companies, with four out of five companies planning to modernize their infrastructure in the next two years. In contrast, nearly 90 percent of respondents said they have not fully developed and executed their operations modernization strategy. Additionally, none of the respondents had fully executed it.
Even with their struggles to modernize, carriers recognize it’s critical to their businesses. The need for insurance operations modernization is high and will continue to increase. On a 10-point scale, the current need was ranked at 7.6 and is expected to grow to 8.0 in the next 12 months. While all insurance processes have important automation and efficiency needs, the greatest needs identified were dynamic pricing, fraud analytics, and personalized add-on offerings. According to the report, investment will increase most in product personalization and telematics-based products.
Insurers realize many internal processes could benefit from modernization, but rating as well as pricing and product personalization were ranked at the top. Advanced simulation, real time monitoring, AI with machine learning at the point of interaction, and automation are all key for carriers to provide the personalized offers that their customers crave.
“Carriers have realized that they must prioritize insurance operations modernization,” said Dror Pockard, Chief Strategy Officer, Earnix. “Technology partners with interoperable, connected, and easy to deploy solutions that offer fast return on investment can leverage carriers’ existing investment. Adopting new technology is critical to help insurers to improve customer experience. The time for modernization is now; any delay will harm carriers’ ability to achieve their business goals.”
About the Report
The survey, conducted by Earnix and Market Strategy Group, LLC in May and June 2022 included 298 insurance executives in North America (~50%), Europe, and Australia. The respondents spanned c-level (9%), IT (20%), analytics (17%), product (18%), underwriting (19%), and actuarial (17%) roles. Detailed interviews were also conducted with dozens insurance executives.
To download a full copy of the report, visit link.