Using technology is definitely not new for insurers. Players are no longer resistant to the idea of technology adoption. The matter of concern for them now is the selection of appropriate technological solutions. With the existence of umpteen solutions promising almost everything that the insurer requires and even more than that, the insurer has to show prudence in adopting technologies that offer solutions to their businesses. Insurers have to be well aware of the perils that they will be exposed to by investing in inefficient technologies. This article examines the touch points between the insurer's value chain and technological applications and details how the business operations can be executed in a cost-effective manner using these applications.
Unprecedented changes that were initiated in the 1990s in the insurance industry have ushered the emerging insurance markets on to the global arena; this elevation on to the global platform brought abundant opportunities and along with them, the associated risks. Insurance is the business of hedging risks and making profits in the process. While this makes risk-taking unavoidable, the challenge, however, lies in managing the risk levels, while converting opportunities into profitable business.
The regulators began singing new tunes for a better risk management as they set out new capital adequacy and solvency norms for the insurers. With these norms, the entry of foreign players and the enhanced level of customer awareness, the rules of the game have changed in all dimensions for the insurers. To survive and grow, they are now left with Hobson's choicerestrategize, the insurers' only mantra for successful survival.
Given the low penetration levels in the emerging insurance markets, the potential of the market is unquestionably high. As the scope for market growth ensures adequate room for all players to get a share in the pie, it definitely calls for smarter operational mechanisms. Better risk management, reduced overhead costs, enhanced customer attraction and retention will be the key success factors. A careful examination will reveal that all these factors are the main drivers for technology adoption.
While technology usage may not be new to most insurers, it is undeniably the utility of technology that is of prime concern. Technology that is archaic, having limited functionality, with little or no information exchange between systems and the intermediaries in the value chain, is more a bane than a boon for the company. Usage of such systems burdens both the financial and human resources of the company. |
