Last week, my colleague Mitch Wein, Novarica SVP, and I co-hosted Novarica’s Specialty/Large Commercial virtual Special Interest Group session, where we covered COVID-19-related topics and technology trends in this insurance segment.
Here are some major takeaways from the well-attended session:
Specialty/large commercial insurers are planning to spend more to do more.
Insurers in general are shifting technology investment priorities, as covered in Novarica’s recent Insurer IT Budgets and Projects: Revisiting 2020 Plans During Pandemic report. Specialty/large commercial insurers, in particular, are looking to spend more on technology than originally planned in 2020 and 2021, as indicated by a snap poll conducted during the first part of the session.
In fact, 75% of poll participants indicated that their company plans to spend more on technology in 2020 and 2021 than planned before the pandemic. Insurers in general plan to spend on new COVID-19 regulatory requirements, automating back-office processes, leveraging collaboration tools, investing in distribution and digital technologies, and minimizing any type of customer footprint at risk locations.
Nonetheless, given the shifting of priorities, specialty/large commercial insurers still face challenges with appropriate allocation of technology investments across lines of business and divisions. In addition, insurers need to maintain their focus on “true north” goals like managing customer experience and meeting agent and distributor needs.
Agent/broker integration is the biggest challenge for specialty/large commercial insurance.
When asked what the biggest challenges today for positive working relationships with brokers and MGA partners is, the leading response (58%) was integration with brokers and MGA partners. As noted in Novarica’s report Business and Technology Trends: Specialty Lines, integration with distribution partners has become a recurring theme across the specialty/large commercial insurance sector.
Interest is growing in vendors that offer unstructured text ingestion solutions to scan application documents and submission attachments and convert them to structured data sets as well as in the rise of distribution APIs between insurers, brokers, and third-party intermediary vendors.
While brokers continue to rely on email when conducting business with underwriters, specialty/large commercial insurers have recognized the importance of having a modern underwriting workbench along with the importance of core software tools being highly configurable to support speed and flexibility. Lack of speed and flexibility is often found to be an Achilles’ heel for specialty/large commercial insurer CIOs.
Emerging technologies are on the horizon, but they are not widely used yet.
Emerging technology is not yet prevalent across the general specialty/large commercial space, but these insurers are investing in emerging technology more for certain lines of business. For instance, data stores and data lakes will need to increase their capacity as the use of sensors, wearables, smart homes, and location devices rises within the specialty/large commercial insurance sector.
The Internet of Things provides carriers with another data source that supports continuous underwriting, as well as an opportunity to provide proactive customer service.
The next virtual Special Interest Group with a focus on specialty/large commercial insurance technology will take place on Thursday, October 15, 2020 at 1 PM ET. Register to attend here.
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