According to a recent report, e-business technology is expected to increase the spending by a number of leading insurance companies worldwide by nearly 90 percent during the next three years.Results from a group survey from PricewaterhouseCoopers and the Economist Intelligence Unit (EIU), while insurance providers realize the benefits of e-business as it relates to cost savings and better customer service, they also know they must invest in more than just technology.
The survey respondents, which included agents/brokers, carriers, re-insurers, banks, broker-dealers and dot-coms, noted that the industry is being presented challenges from a number of e-business issues. These include: limitations of current processes; deficiencies in technological infrastructure; the sale of complex products online; the transformation of distribution channels; and concerns regarding security and privacy.
The most recognized factor is that insurers feel there is a shortage of key e-business leadership at the top levels. Survey results indicate some two-thirds of respondents see their companies lack sufficient e-business leadership capabilities, and only a handful of insurance providers at this time have the necessary technological skills available for e-business in-house.
According to survey figures, a mere 7 percent of agents and brokers and 17 percent of insurance carriers have web-enabled the back-end processing of policy applications. Looking ahead to 2004, those figures are expected to jump to 93 percent and 71 percent, respectively.
Also expected in that time period is that respondents see e-business producing 19 percent in annual savings on average, compared with a current figure of 7 percent. The figures indicate that putting back-office processes online will be a major factor in realizing those cost savings.
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