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July 24 2013 | Deb Smallwood

It is no real secret that market intelligence is essential for both insurers and solution providers. In our industry things are changing at an alarming pace and it is tough to keep up. There are numerous internal and external factors that are influencing and shaping the US Property and Casualty (P&C) insurance industry. These factors shift, meld, and morph over time, creating a variety of challenges and opportunities. Yet, many in the industry just aren’t aware of what is happening – both inside and outside the industry. It’s not because they are blind. It is largely because they don’t have the time to really analyze the full picture and determine what it means to them, so they aren’t always able to envision how trends are changing the game. At SMA, we continually track and monitor the trends and the directions they are taking. We analyze their effects on business strategies and decisions and look at the opportunities that are on the horizon. We examine how the changes are impacting solution and technology decisions and spending levels.

This is an important time for this industry; the gap between leaders and laggards is expanding. The technology choices and investments that insurers are making today are critical – there is simply not time to redo steps taken in the wrong direction.

Continuing to invest in the future is essential. Many insurers are focused on expense reduction, but it is imperative that insurers realistically assess market positioning and fund initiatives to stay on top of or even exceed what the competition is doing. For example, the personal automobile market requires a strong product, pinpoint pricing, and a honed marketing strategy; however, insurers must possess strong data and analytics capabilities and a nimble organizational structure to react quickly to fast moving consumer and loss trends in the marketplace. Furthermore, a robust commercial lines strategy not only requires automation for certain accounts, but it must also equip the underwriter with the right information and tools so as not to overlook “good” risks. Sophisticated modeling tools with new sources are becoming increasingly important for effectively managing property lines, because weather patterns continue to be unpredictable. The knowledge gained from the models is imperative for both assessing the company’s risk portfolio and effectively managing major loss events.

Innovation in insurance is here, driven by a combination of the pace of change itself and the pace of technology adoption. The reality is that insurers need to consider how the nine SMA WatchPoints are impacting their business today and then evaluate the potential impact they will have on their objectives and targets for future operations.

This blog is part of the Q32013 WatchPoint Report – part of the SMA Marketintel Industry and Insurer Research series. This series helps insurers and solution providers better understand and analyze market and business trends, investigate the impact on their business, and make more informed technology direction and decision investments. Click here to learn more about SMA’s research.

 


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To learn more, please contact:
Deb Smallwood
Founder & CEO
Strategy Meets Action
603.770.9090