Insurance Carriers Need to Innovate to Adapt to the “New Normal”

“Is Today the New Normal for the U.S. Insurance Industry?,” was the title of a webinar held last week by Boston-based analyst firm Celent. Moderated by senior analyst Donald Light, the webinar concerned his research report about the current downturn in the economy and its effect on the insurance industry. In the report, Light brings up the question of whether the slowdown in the insurance industry is a passing phase or a long-term situation. Light didn’t offer up a concrete answer, but he did conclude that either way, insurers need to be prepared to weather the storm with a focus on flexibility and agility.

Contents claims is one area ripe for innovation where carriers can introduce more flexibility and agility, costs can be reduced, revenue can be diversified and customer service can be improved. New valuation technologies can help carriers reduce claims leakage – the difference between the amount actually paid out on claims, and what should have been paid out. Carriers lose millions of dollars a year during the claim settlement process. Dollars that are wasted because carriers overlook tools that can help them more accurately value contents.

No one knows for sure what the future holds for the economy, let alone for the insurance industry, but it is clear that the industry needs to move forward with innovation and new technologies to be more flexible and agile. Minimizing waste, controlling costs and diversifying offerings will make a difference in the long run.

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