It should come as no great surprise that those stick-in-the-mud personal lines insurers are less likely to get excited about the latest software advances than their counterparts in the wheeler-dealer world of commercial lines.
That's just one of the items uncovered in a report from management consultant Robert E. Nolan Co. (www.renolan.com), "A New Millennium View: The Future of the P/C Industry." The company surveyed 217 readers of National Underwriter's property and casualty edition (a sister publication of Technology Decisions). The group included CEOs, CFOs, and COOs from the P&C industry.
"I think the commercial lines are more open to the potential of technology and the investment opportunities it represents," said Rod Travers, senior vice president of technology for Robert E. Nolan. "The personal lines are more reticent to embrace technology."
Travers said the survey also confirmed the belief that larger carriers are more willing to take a chance on technology. The report broke down its respondents by dollars, dividing carriers into five categories by net written premium, from less than $300 million to more than $2.5 billion. "Technology is more of a challenge for the mid-tiers [mid-size and smaller carriers]. When they invest, they have to get it right," Travers said.
Larger companies are more likely to take a risk on technology. "For them it's not a one shot deal," he said. "They can try things in one segment of their operation. If it doesn't work out, they have the wherewithal to try something else."
That's why outsourcing has become such an attractive alternative for the mid-tiers. "There are a lot easier ways to move information back and forth, although the complexities are still somewhat daunting," Travers said. "It is more of a challenge for the larger companies, but when it comes to specialized pieces of the process, it is often easier and faster to outsource."
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