Question

Discussion

1. In a new report, Celent Model Insurer 2013: Case Studies of Effective Technology Use in Insurance, Celent recognizes 17 insurance technology initiatives as “Model Insurer Components.” These best practices in the use of technology span key areas of the product and policyholder lifecycle, including product development, distribution, underwriting, policy administration, IT management, claims, and infrastructure. The report also reviews IT best practices and measurable business results used in evaluating the Model Insurer Components.

“Insurers continue to stress innovation in their initiatives. However, IT projects that reduce long-term costs, improve back office operations, and provide better customer service are also prevalent in this year’s award winning projects,”“Insurers continue to concentrate on improving operations but are also stepping up their use of emerging technologies.”

Discuss the importance of information technology to an insurer and evaluate the IT trends for insurers based on the materials given.

Answer 1

Meaning of Information Technology :

The devices and techniques used to store, process, manage transit and communicate information, encompass various technologies such as computing, microelectronics and telecommunication is known as Information Technology.

Importance of information technology to an insurer :

Importance of information technology to an insurer are as follows :

1. Policy Servicing of existing policies:

The existing policyholders may require various services after taking the insurance policy For eg: Change of Nominee, Change of address, of change in mode of payment, assignment of the policy, Claims payment etc. These changes or payment can be made very easily through computers.

2. Loans:

The Policyholders do take loans and the insurer has to maintain the records as the insurer has to recover the loan from the policyholder along with the interest. The recovery of loan may be regular or recovery at the time of payment of claim.

3. New Business:

As and when the new business is acquired the initial data of a policyholder is quite large and as stated above the data is to be maintained for longer period therefore storage of data in computer is useful.

4. Renewal notice/Billing:

Renewal notices to be sent for the payment of the premium and with a no. of policyholders are very large and the renewal is on different dates. The computer generates the renewal notice at very high speed and does it automatically. The inter-mediatory bills are generated very fast and quickly.

5. Statistics and MIS Claims:

As the data in computer can be stored for longer period the data may be useful for the insurer to prepare the type of policies are sold in the market and type of claim arisen in the particular region. These types of data will be useful for management to take any decision.

IT trends for insurers

1. Digital & Onmichannel

2. Big Data & Anlytical

3. Legacy System transformation

4. Cybersecurity

5. Insurtech & Blockchain