Given the economic upheaval of the past several years, most companies have been happy to merely remain profitable and weather the storm. But in 2011, insurers are looking to tighten their balance sheets and set themselves up for long-term profitability.
Three main initiatives will dominate the investment objectives for carriers this year, according to a recent PricewaterhouseCoopers report. First comes operations and platforms. Insurance companies will attempt to transform claims, policy, administration and billing into profit centers that can better respond to customer and agent demands. They will also try to automate processes that do not necessarily require "the human touch."
Lastly, insurers will spend money on increasing intelligence gathering methods, including analytics, modeling and acquiring nontraditional data that can help price risks and minimize losses. In addition to these long-term strategic goals, the PwC report identifies regulation as an ongoing concern vital to insurers. "Regulatory, standards-setting and legislative developments will present considerable challenges to insurers' entire organizations," said Tom Sullivan, principal of PricewaterhouseCoopers US. "Everything from compliance, financial reporting and actuarial to systems and HR will feel their impact."