Research released by IT analyst firm Quocirca,in conjunction with business process platform KnowledgeKube from Mercato Solutions, reveals the insurance industry is potentially wasting up to 3,000 working hours per company per annum due to inflexible systems and old processes.
And the issue is being exacerbated by outdated and often disparate technology, which is ultimately restricting the speed of deal processing.
The study focussed on brokers and cover holders during Q3 2013 and highlights that a lack of alignment between IT and processes means that many within the industry are also failing to extract sufficient value from both internal and external data sources and are unable to generate the levels of reporting that many other industries would consider commonplace. This ultimately reduces the industry’s ability to react and adapt to change, with a significant amount of time being wasted on processes which fail to take full advantage of new channels, audiences or routes to market.
When asked to quantify the impact of this in terms of staff resources, respondents estimated that wasted time could total as much as 3,000 sales hours per company, per year. In addition, one in three respondents stated they did not have the insight to report confidently on customer satisfaction, one in eight could not report on sales-out and a staggering 3% did not believe their systems were compliant in this FCA regulated industry.
“The insurance sector is not immune to the challenges of needing to bring in more business or process existing opportunities faster, and organisations should be looking to technology that will better support them in their efforts in these areas,” says Rob Bamforth, principal analyst at Quocirca Research. “The capability gap between business processes and the technology that underpins them is crucial and the majority of respondents wanted to see improvements in processes and how IT could help them become more effective in managing and closing deals.”
“Many of our respondents put a higher value on software tools that enable them to deliver products and services faster than on the ability of the IT department to support process change. This signifies a fundamental pain point that is holding insurance businesses back. Software that enables users to quickly and easily do the tasks they require without the need for abundant technical support will undoubtedly unlock revenue returns for the sector.”
Steve Vallis, Business Systems Consultant at Mercato Solutions, said: “It is widely acknowledged that automation of knowledge-based processes improves throughput. McKinsey has estimated this to be worth up to $6.7TN per year worldwide by 2025.
“Our research qualifies the scale of opportunity for the UK insurance industry, especially when trading online, where greater productivity comes from applying flexible technology that enables the business to define and take products to market faster, without costly and time consuming IT intervention. This means insurance products can be developed, managed and transacted better, improving customer experience, competitive advantage and sales efficiency.”