More than 150 leading insurance companies worldwide expect to increase their spending on e-business technology by 89 per cent over the next three years.
While insurance providers see the benefits of e-business in terms of cost savings and improved customer service, they realise that in order to capitalise on e-business they must invest in more than technology, a joint survey by PricewaterhouseCoopers (PwC) and the Economist Intelligence Unit (EIU) has revealed.
The study also suggests that the players will have to invest in process and organisational redesign to maximise return on investment at lowest cost. The companies surveyed in the study expects e-business to generate an average 19 per cent in annual savings, compared with the present level of seven per cent.
Deepening customer relationships and cutting costs are top e-business priorities, says the report, and placing back-office processes online will be a key source of cost savings. The latter is expected to throw up opportunities for developing countries offering back-room support such as India, said insurance industry sources here.
In the long run, larger numbers of carriers and other insurance providers will rely on outsourcing for e-business capabilities. They will look to third parties not only for web site construction and operation, but also for a broader range of post-sale and back-office support - including claims, underwriting and actuarial services.
Online customer relationship management and integrated, multiple distribution channels are the other top priorities for enhancing customer relationships. The study also shows that a few traditional insurance providers are prepared to realise the full potential of e-business. Nearly 50 per cent of respondents to the survey suggested that their existing business processes are a top barrier to leveraging e-business, indicating that processes will need to be re-engineered.
Also , insurance providers lack a broad, company-wide e-business strategy and were taking a piecemeal approach to e-business. E-business was yet to be an integral component of business.
Alliances with service providers, other insurers and non-financial institutions would help companies achieve economies of scale and extend product and service capabilities, said the study. Also, more advanced customer services will be online, with increasing number and complexity of online offerings like claims settlement, real-time customer service and billing.
Meanwhile, agents and brokers will continue to dominate distribution using Internet technologies and retain much of their current role. Eventually, agents and brokers may choose to do business only with those carriers that can work with them online.
Selling and servicing through carriers' web sites and call centres will grow sharply, providing them with direct access to customers and customer information.
