Insurance technology sets to increase as pressure on operating margins increase during 2016, according to a study by financial information firm S&P Capital IQ.
The report said that with the exception of life insurance, year-to-date operating margins for multiline insurers have taken a serious hit - dropping almost two percentage points to 10.46%. Challenging industry conditions were said to be forcing insurers to ‘trim product offerings’ but technology was offering a means of addressing changes in consumer purchasing preferences.
“While the insurance industry remains heavily dependent on third-party intermediaries — agents and brokers — to market and distribute their products, a growing number of consumers prefer to research products and make purchases online,” the report says.
“This means the degree to which an insurer is able to meet these shifts in purchasing trends will be a key competitive factor.”
The report, Marketscope Advisor Trends & Ideas: Insurance Predictions for 2016, adds that policy comparison sites are a prime example of technology’s impact on the insurance industry.
“Tech innovations like Policy Genius and Google Compare, shopping sites which allow consumers to compare policies, are two examples. While these sites may help insurers increase their online presence, they also serve to further commoditise insurance products.”