While nearly half (49 percent) of U.S. insurers cite U.S.-based insurance companies as their biggest competition, a significant segment (30 percent) believe non-conventional sources are the biggest threat.
Xchanging Plc, a business process, procurement and technology services provider, unveils this finding in “The 2014 Insurance Technology and Spending Trends Report.” The 15-question survey encompasses responses from 75 insurance industry practitioners conducted at the Acord Loma Forum, May 4-6, 2014.
Most survey respondents are representatives from the life/annuity, property & casualty and reinsurance/large commercial insurance sectors. Respondents included directors and project managers (26 percent), executives (27 percent), IT staff (16 percent), as well as agents, brokers, analysts and others.
The report reveals that only 11 percent of respondents rank attracting qualified talent as the top challenge, an “alarmingly low” percentage in the survey authors’ view. About one-third of individuals polled say that talent acquisition was lower on their list of priorities.
Nearly half (48 percent) of respondents have the “strategic sourcing of talent” as the second highest priority, their aim being to increase efficiency, cost savings and competitiveness.
About 40 percent of respondents say their level of business process outsourcing (BPO) engagement will increase. Of the above percentage, more than half (53 percent) say they will increase IT outsourcing. And almost a third (32 percent) will outsource back-office services this year, including policy and claims administrative duties.
Based on this study, technology investment is a clear priority for an industry widely considered to be a relative laggard in this area.
- 67 percent of respondents say they expect their company’s IT budget to increase this year with 44 percent significantly increasing it (6-10 percent increase or more).
- Investment in technology is the number one priority for 60 percent of respondents while 86 percent ranking technology as the first or second priority.
- 39 percent of respondents select mobility as the first or second priority; claims investment is second as the top priority with 16 percent of respondents.
- The report adds that big data/analytics and mobile apps are investment priorities, but e-placing platforms are also receiving attention.
- In terms of claims technologies, respondents most value predictive modeling/analytics (42 percent) and big data (25 percent) as focus areas.
- 36 percent of respondents say big data/analytics will have the highest likelihood of an increased investment this year, while more than a quarter (27 percent) expect mobile applications to get a boost.
- Only 8 percent rank cyber security technology as the most valued.
- Though early in development, interest in e-placing platforms is growing with 45 percent of respondents saying it is a first, second or third priority.
When asked for the biggest opportunities in 2014, 75 percent of respondents rank engaging customers in new ways as a first or second priority. This conclusion “most likely speaks to the tremendous interest in Big Data and mobile apps,” the report states.