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Posted by Ellen Carney on October 25, 2011
One of the things that people like about the insurance industry is that the business of insurance doesn't change much. Insurance carriers have pretty much done the same thing: rate risk, issue policies, settle claims, sell through agents, and invest our premiums, all the stuff that makes them insurance companies. We’ve talked a lot about this idea of “business capabilities” here are Forrester, essentially the notion of what an industry does. These capabilities change very slowly, if at all. Capability changes are usually the result of some big structural economic change--think of the now-modern and booming Russian insurance industry growing after the collapse of the former Communist state. Of course, the way in which those capabilities get executed in a mature insurance market is influenced by what’s going on outside the four walls of carrier and can change very quickly.
Through our ongoing conversations with technology providers, we’ve called out 11 vendors in a report we’ve just published, that caught our attention because they’re helping property and casualty, life and health insurers deal with a variety of business pressures. For instance, despite assertions that the agent channel is dead, it’s in fact, alive, well, and looking to differentiate its value in a world of where direct insurance media spend rivals that of beer and ED drug companies. Vendors like Cazador offer the small business agent marketing and sales tools that add new polish to this insurance consumer touchpoint. And with this year’s CAT losses, insurers are looking to handle large volumes of structural claims more efficiently, a need that companies like Accurence can fill. And because disputed claims often result in litigation, insurers are looking to solutions like those offered by Mitratech for ways to better handle complex claims and the associated legal expenses. Finally, legislation, such as the 2010 Patient Protection and Affordable Care Act is spawning new business models such as Social Interest Solutions that help streamline the delivery of mandated services.
Finally, we also serve up five recommendations for aligning new vendor offerings to business capabilities. These recommendations include means to better identify solutions (and vendors) that can offer solutions that can span multiple capabilities, thereby accelerating the ROI how to use business capabilities to diplomatically address situations where business side of the house has their own ideas; and ways to evaluate and introduce innovative technology without impacting production environments.
Forrester clients, check out the full report here.
What do you think of using business capabilities to inform vendor technology evaluations? Are there gaps in how you’re executing on business capabilities that we’ve not addressed? Tell us what you think.