Insurers are shifting eBusiness investment from the front to the back office.
The major general insurance markets in France, Germany, Spain, Italy, Sweden and the UK have all seen significant underwriting losses as economies slow and competition squeezes margins. Insurers need to improve customer retention levels to survive in the aggressive marketplace.
However, insurers must focus their eClaims investment towards improving their back office functionality rather than front, as this is where the more significant return on investment can be achieved. Up until now insurers have primarily invested in web-enabled front office applications.
This was partly due to a fear that if underwriters failed to invest in providing Internet functionality directly to their customers they would be left behind their competitors in terms of customer acquisition. However, there has recently been a shift in opinion, as insurers choose to pursue visible returns on investments instead of brand building.
Insurers have increasingly been realizing that there are significant gains to be made from implementing Internet technologies across the back-end of the supply chain. For example, instead of printing out copies of the claim forms, the information can be integrated into the back office applications through full automation.
Some insurers have reported a 30% increase in staff productivity, with a reduction in the error rate from 40% to 3% and a cost saving of between 10% and 12% in repairing or replacing insured items since starting to use the technology.
These savings will pave the way for more proactive developments. Implementing such systems will allow insurers to concentrate activity on improving customer service and offering a wider portfolio of services, rather than on processing. Equipped with strong links with suppliers through eProcurement and sophisticated CRM applications, insurers are ideally placed to exploit cross-selling opportunities through alliances, partnerships and joint ventures.
