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Insurers See Technology As Driving Dramatic Change. (Technology).

Insurers have shifted their view about technology and now indicate that they believe it will drive significant, even revolutionary change in the industry, according to a study by management and actuarial consulting firm Tillinghast-Towers Perrin.

Companies cited Fidelity Investments, Charles Schwab & Co. and Progressive Corp., in that order, as their industry role models, according to the survey. Respondents said these companies are innovative, customer-focused and able to use technology for positive results for their companies and their customers.

The survey revealed that 91% of respondents believe change will be dramatic, and one-third feel it will be "revolutionary." And its the pragmatic insurance company executives, who don't embrace change lightly, who are calling the expected change revolutionary, Jenny Emery, Tillinghast's global e-business leader, said in a statement.

Respondents also described the changes they've seen in the industry over the past three years. Executives said it has become more important to "own" the relationship with end customers, enter into profitable business partnerships and bring innovative products to market, Tillinghast said. This implies a dramatic change for insurers, Tillinghast said. It suggests data mining and customer relationship management will become crucial if insurers are serious about making end customers their priority.

A majority of companies believe technology has led to some or significant progress over the past three years, especially in using new technologies to improve customer service (85%), improve new business processing (82%) and enhance and support existing distribution channels (87%). But 60% say that the adoption of new technologies has not led to a significant reduction in costs in the industry, Tillinghast said.

Companies that view themselves as ahead of the industry in implementing new technologies made up 20% of the respondents, and they reported that they've made significant progress in using new technology to enhance and support existing distribution channels (64% vs. 18%), improve new business processing (55% vs. 23%) and enhance customer service (55% vs. 36%).

A distinguishing feature of those that see themselves as leaders is that they recognize underwriting as an area where insurers can and must differentiate themselves, Jeanne Hollister, a consulting actuary with Tillinghast and e-business initiative manager, said in a statement. "On the other hand, the majority may have assigned it a lower priority, because they are not yet sure how new sources of data may fundamentally change insurance products."
Focus on Future Sales

Most insurance companies said they weren't using new technologies to
sell many of their products today. But they are optimistic that within
three years, new technologies will be developed that will change the way
they reach customers.

 % of Respondents
% of Sales Using New Technologies Today In 3 years

Less than 5% 73% 24%
5%-10% 16% 35%
11%-25% 6% 20%
26%-50% 2% 12%
More than 50% 3% 9%

Source: Tillinghast-Towers Perrin e-Track: Business, Strategy and
Technology

Note: Table made from bar graph
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Comment:Insurers See Technology As Driving Dramatic Change. (Technology).
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Dec 1, 2001
Words:474
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