US P&C Insurers, Hammered by Natural Calamities, Leverage Technology to Lower Costs, Improve Customer Experience--Everest Group
New Everest Group report details these and other profitability drivers for Property and Casualty Insurers, including product innovation, underwriting excellence, fraud control and effective capital management
DALLAS, July 24, 2018 /PRNewswire-PRWeb/ -- U.S. property and casualty (P&C) insurers, hammered in 2017 by one of the worst years for natural disasters in recorded history, face uncommon margin pressures and are struggling to find strategies for profitable growth. U.S. P&C insurers are not alone in this struggle as insurers throughout the world face additional margin pressures such as modest growth in investment income, continued geopolitical uncertainty, increasing customer expectations, the rise of non-traditional competition from InsurTechs, and heightened complexity of risks.
Nevertheless, Everest Group counsels that P&C insurers can convert challenges to opportunities. Specifically, P&C insurers can employ these five key strategic levers to achieve profitable growth:
- Product innovation, particularly in coverage, pricing and services
- Underwriting excellence and fraud control, especially using predictive analytics, artificial intelligence (AI), Internet of Things (IoT) and blockchain
- Effective capital management, such as investing in profitable segments, targeting low-risk customers and developing greater capital self-sufficiency
- Leveraging technologies (such as mobility, telematics, automation and AI, drones and blockchain) to expanding digital use cases to middle- and back-office operations
- Delivering excellent customer experiences through omnichannel services and self-service, straight through processing (STP), on-demand products and bundled services, and faster and simpler customer-facing processes.
"Property and casualty insurers are facing macro and micro challenges that make it difficult to achieve profitable growth," said Skand Bhargava, practice director, Business Process Services, at Everest Group. "As a result, they are expanding their partnerships with BPO providers from just outsourcing of administrative tasks to more value-added services delivered through a blend of operational understanding, technology knowhow, and domain expertise."
The P&C insurance business process outsourcing (BPO) market consistently grew at approximately 13 percent from 2015 to 2017, and the market growth is only expected to accelerate in the future as P&C insurers seek strategies for profitable growth in a heavily dynamic market.
A few BPO service providers are stepping-up to assist insurers in mitigating their present challenges. Service providers are leveraging domain expertise for consulting and design thinking services, technologies such as automation for increasing operational efficiencies, and analytics for greater value-addition. These are over and above the usual cost savings that are associated with an outsourced delivery model.
Everest Group explores these findings and others in a recently published report: "Property and Casualty (P&C) Insurance BPO: Embracing Growth Through Digital Empowerment." This report provides comprehensive coverage of the global P&C insurance BPO market, including adoption trends across geographies and buyer size, factors impacting the market, key solution characteristics, emerging trends and service provider landscape.
***Download a complimentary abstract of the report.*** (Registration required.)
About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empowers clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.
SOURCE Everest Group
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