Analysts: Insurers Need to Accelerate Product Development

More than 350 insurance industry executives attended the users’ forum in Naples, Fla. The event featured more than 150 sessions on topics ranging from industry trends to how product configuration software can reduce time to market for insurance products.

“Insurers that are unable to assess their customers’ needs, build products to support them, and deliver them to the sales channels quickly will find it difficult to compete,” says Kimberly Harris-Ferrante, research vice president at Stamford, Conn.-based Gartner Inc. “Product configuration technologies let insurers craft and test new products with less IT involvement, improve integration between the product engine and policy administration systems, and improve product management through the use of a central product library.”

“Improving time to market for life and annuity products with their rapidly proliferating features, minimums and guarantees is a widely acknowledged competitive necessity,” says Matthew Josefowicz, managing director of Celent LLC’s insurance practice. “The ability to innovate products is worthless without the ability to get those products to market rapidly.”

The need for more finely tuned products was identified in the November 2006 report “Insurance CIO/CTO Pressures, Priorities, Projects and Plans for 2007: Survey Results” from Boston-based Celent. Celent presented the results of the survey at the conference.

The report also showed that top areas of significant new project spending vary by size and sector, but include initiatives focused on underwriting, claims, product development and data mastery. Document handling, policy administration system replacement, ACORD XML adoption, and agent portals, and BPM all show up among the most common areas of significant new project spending. The report lists the top areas of "significant" and "some" new project spending by four size-and-sector groups of insurer respondents.

Web services/SOA is real, according to the report. Adoption of enterprise service buses and UDDI infrastructures may not yet be widespread, but the average insurer had approximately 15 services live within its enterprise, and about half of the sample is using Web services/SOA for internal and external integration to enable new business and underwriting. ACORD XML continues to play a role in more than half of these initiatives.

The incremental mainframe migration is continuing, and Linux is becoming an important element of platform modernization along with Windows. While most large insurers rely on at least partially on mainframes for their core policy systems, the overall role of mainframes continues to wane gradually.

Insurance Fraud Portal

Fraud detection news and articles

Insurance fraud is increasing more each year, with the abuse particularly impacting health, workers' compensation and auto insurance lines. Fraud ranges from sophisticated crime rings involving multiple parties to cases where individuals or medical health providers act alone to abuse the system.

In response, a growing number of insurers have begun to implement sophisticated fraud detection tools to support manual methods and combat what experts estimate is an $80 billion annual problem for U.S. insurers. Fraud management technology that uses predictive modeling to identify suspicious claims can accurately cull out high-risk claims and label them at the earliest possible moment. It not only makes it practical for insurers to process and close the vast majority of claims faster, it focuses the adjusters review on claims that require the most attention. Lastly, it provides higher quality referrals to investigative units.

News briefs and articles on insurance fraud and fraud detection tools are available below.