Research released by analyst firm Quocirca, in conjunction with insurance trading 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 processes, which are ultimately restricting the speed of deal processing.
The study focused on brokers and cover holders during Q3 2013 and highlights that inflexible, disparate processes and technology are holding the industry back when it comes to driving income generation.
A total of 50% of the companies interviewed identified they had inflexible systems and that improvements could be made internally to maximise sales time by offering a greater variety of products and more efficient deal processing. This could lead to improved competition, customer experience, conversion rates and sales volumes.
A significant amount of time is currently wasted by processes which fail to take full advantage of multiple channels or test new routes to market and alternative prospect audiences.
When asked to quantify the impact of this in terms of sales staff resources, respondents estimated that wasted time could total as much as 3,000 hours per company, per year.
It was universally acknowledged amongst respondents that well codified and adaptable systems are essential to driving volume and value of sales, yet many felt there was considerable room for improvement.
The research indicates that inflexibility is preventing some fundamental processes from being undertaken. One in three stated they could not 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.
“The study shows the impact that inflexible systems and processes can have on revenue generation for insurance companies,” says Rob Bamforth, principal analyst at Quocirca Research. “Crucial, though, is the capability gap between business processes and the technology that underpins them.
“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, where greater productivity comes from applying flexible technology to solid processes, without costly and time-consuming IT intervention. This means products can be developed, managed and transacted better, improving customer experience and sales efficiency.”