The start of a new year is a great time to take stock and look ahead. The insurance industry has managed to pull through the last 12 months, given the ups and downs that it has had to deal with. In fact, following a series of economic and natural catastrophes and the unknown effect that hosting the Olympic Games may have, I am struggling to think of a period when there has been so much focus on the insurance industry as a whole. So, what challenges lie-ahead as we progress into 2012?
For general insurers it appears that building stronger bridges with their customers is imperative to driving long term profitability. Levels of trust remain unsatisfactorily low for both insurer and insured due to regulatory and legislative changes and at times, slow speeds of settlement ( for example during the summer riots). There is a need to deliver a better customer experience and ensure that the customer becomes the central platform from which the organisation operates and from which any business decision is evaluated.
For the corporate market the regulatory changes will continue to present considerable challenges when it comes to accurately managing data, particularly when undergoing big mergers and acquisitions. Insurers are required to prove to the regulators that they are feeding complete, accurate and timely data, in the required standard format, into their risk assessment frameworks, and it is vital that they have appropriate systems and processes in place to manage this. Key amongst these changes are Round 2 from the International Financial Reporting Standards, the Test Achats ruling in the European Court of Justice, and last but not least Solvency II.
Building stronger bridges with policyholders will be crucial in 2012
Rebecca C. Amoroso, vice chairman and US insurance leader at Deloitte LLP, has also been looking ahead to 2012. Amoroso believes that industry growth will come from three areas: organic, based on tracking rapidly evolving customer expectations with a differentiated offer; bigger acquisitions following 2011’s strategic bolt-on and divest activities; and technology as a game changer.
At the heart of this belief that technology is a game changer is adding new functionality via the cloud, enhancing communications via social media, expanding the use of predictive analytics, and capitalising on mobile apps to deliver an offer that can differentiate the winners from the losers.
And so for Pitney Bowes Software, 2012 therefore looks like it could be an interesting year. Our business is all about helping insurance companies manage data, customers, and risk more effectively. But perhaps we have missed something. What do you think are the big challenges and opportunities in 2012?
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