OLDWICK, N.J.–(BUSINESS WIRE)–AnAM BestSurvey of property/casualty insurers revealed that more than half of respondents consider digitization or technological investments the greatest challenges in modernizing distribution and growing business.
The Bests Special ReportAccording to the report, Rapidly Evolving Digital Landscape Revamps Distribution For P/C Insurers (PDF), 56% of respondents viewed technological investment and digitalization in significant ways as a major distribution obstacle. Another 36% identified improving customer experience or understanding consumer preferences as the leading challenges. This means that nearly 80% of insurers report technology and innovation as the areas in which they are focusing their most important distribution channel enhancements.
According to Jason Hopper (associate editor, industry research, and analytics at AM Best), the survey confirmed that insurers had to quickly pivot to meet customer demands and their own business needs. The pandemic resulted in a rapid digital transformation, particularly for tech-exposed lines like automobile.
Advances in predictive modelling and pricing analytics have allowed carriers to pursue profitable expansion. The report says that insurtech growth in the auto- and homeowners markets should continue as insurers work to find effective and efficient ways of reaching and servicing customers. Automated underwriting contributes a significant percentage of new sales.
A survey found that 70% of companies are satisfied with their distribution innovation efforts. In addition, companies that are more satisfied have seen an average increase in annual premium growth over the past ten years. Half of respondents said that they don’t think there are any new distribution channels. However, 25% are considering direct-to-consumer models (DTC), while 18% are looking at independent agents and other channels.
Robert Raber (director, AM Best) said that there has been a transition in which the cost to obtain new business is driven primarily by efficient returnsmaximizing results at the lowest cost possible. AM Best anticipates this to lead AM Best to conduct an in-depth review on distribution costsThe amount that carriers pay internally for acquisition and the amount they pay to partnersLooking to ensure that customer service is of a high quality and distribution reach.
Please visit this link to access the full version of this special report. http://www3.ambest.com/bestweek/purchase.asp?record_code=318822.
AM Best is a global credit rating agency and news publisher. It specializes in the insurance sector. The company is headquartered in the United States and has regional offices in New York City, London, Amsterdam Dubai, Hong Kong, Singapore, Mexico City, Dubai, Dubai, Hong Kong, Singapore, Hong Kong, Singapore, and Dubai. Visit www.seaport.com for more information www.ambest.com.
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