Re-inventing traditional ways of doing business is critical to companies who want to survive in the increasingly competitive insurance industry. This was the key message at a recent industry briefing held by CMG, the global Information & Communications Technology, services group, and eXcelon, the business-to-business infrastructure software provider. The aim of the session was to show the attending insurers how to translate electronic presence into an electronic strategy.
Industry experts from CMG and eXcelon pointed out that in both business-to-business and business-to-consumer markets, eCommerce provides opportunities for insurers to work more effectively with their stakeholders. Overall, 70% of attendees felt that eCommerce offers greater opportunities for them in the forthcoming new year.
The speakers, Simon Harrington from CMG and Adrian Pasciuta from eXcelon, advised insurers to adopt a more strategic focus for their online trading activities. Business-to-business technology is making it possible to outsource underwriting, policy administration, claims management and risk management to specialist providers. Insurers were reminded that location is no longer an issue, as this can be achieved over the Internet and with international suppliers where it proves to be cost effective. Insurers can then focus on their core competencies of product design and customer service.
Attendees were told that by implementing business-to-business technology insurers can bring efficiency improvements to their distribution, administration and claims settlement processes. It was stated that administration costs for online policies cost just £0.31 in comparison with traditional administration policy costs of £13.
It was also stated that business-to-business eCommerce capabilities need more breadth and depth. By utilising a flexible protocol standard, such as XML, as an integral part of their eCommerce strategies, insurers can integrate disparate external and internal systems far more easily. Indeed, the benefits of adopting the XML standard result in significant cost saving, fast returns on investment and improved communications. Nearly 60% of the insurers attending the event admitted that poor communication between systems represented a major impediment to successful integration, and thereby achieve significant cost savings, returns on investments and improve communications. 60% of those insurers attending admitted that poor communication between systems is currently one of the major challenges to successful integration.
Simon Harrington, consultant from CMG's Insurance Division commented:
"Now is the time for insurers to begin to add to their existing electronic capabilities. Much of the focus has been put on the consumer-facing side of eCommerce over the last year. It's only by conducting strategic eCommerce partnerships via the eCommerce model and by getting consumer facing systems right, that insurers can boast a comprehensive eCommerce strategy that will stand them in good stead."
Adrian Pasciuta, eXcelon's eSolutions Manager added, "Business-to-business technology enables insurers to optimise their value chains, automate business partner collaboration and improve efficiencies in their back office systems. These competitive advantages will enable insurers to focus on core competencies and to maximise value generated from their major assets: their customers and their brands."