Gartner, Inc. has identified 10 technologies that will have the greatest impact for the property and casualty (P&C) insurance industry. These technologies will challenge existing business processes, support the emergence of new business models and allow companies to successfully differentiate themselves to drive revenue growth.

“There is a long list of technologies that P&C insurers can use to improve their processes — from product development through customer service. Many of these technologies, however, provide only incremental or minor improvements, have limited or no return on investment (ROI), or do not promise to help P&C insurers radically change their business models, reduce operational costs or generate revenue,” notes Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner. “With budgets challenged and with limited funding for discretionary spending, it is imperative that organizations prioritize their investments favoring those that will generate the greatest ROI and drive the most value.”

The 10 technologies that have the greatest impact on the P&C insurance industry include (in no particular order):

Modern Policy and Claims Management Systems
Modern policy and claims management systems have been developed that are componentized (sold independently, rather than in a suite), with enhanced workflow and business process management (BPM) capabilities, with rules that are separate from the source code for easy configuration, that support industry standards and that are built on newer technology platforms. The adoption of these systems by personal and commercial P&C insurers can provide significant value, including reducing the total cost of ownership when legacy systems are decommissioned, faster rules and workflow changes, easier integration with surrounding systems and improved long-term maintenance.

Web Services and SOA Tools
P&C insurers operate a large ecosystem of systems and applications that integrate for seamless processing. In the past, companies had to hard-code integration between systems, which was costly, time-consuming, created challenges when applications were replaced and integration had to be redone, and was often difficult to overall due to technology incompatibility. The use of Web services/service-oriented architecture (SOA) enables companies to deploy services instead of using one-to-one integration. These technologies will help insurers improve their straight-through processing (STP) capabilities and reduce integration costs.

Business Intelligence and Analytics

In 2010, P&C insurers are increasing their focus on improving how data is used and the value derived from past investments in data warehousing. The outcome will be improved risk management, compliance/reporting and customer intelligence that can be used for personalization as well as decisions regarding channels and products, and insight into performance and process problems.

Predictive Modeling Tools
Traditional data analysis processes are typically historical (analysis and reporting of the past) or current day (analysis and reporting of current-day positions). Using predictive-modeling technologies, insurers can analyze data and create models that will enable them to predict future behaviors or outcomes. This will allow companies to look into the future and make predictions based on historical data analysis, pattern recognition and modeling. This insight will help companies avoid risks, understand future customer behavior (so that they can intervene as needed), offer proactive customer service, project losses due to catastrophes and improve underwriting profitability.

Advanced Fraud Detection Solutions
It is key that insurers reduce losses and leakage to retain profitability. Better control of fraud is essential in accomplishing these goals. Advanced tools analyze data (structured and unstructured) to identify fraudulent claims in real time at point of data entry. This will assist P&C insurers in reducing losses that result in driving up operational costs and may result in companies having to increase insurance premiums based on these losses.