Many property and casualty (P&C) insurance companies are heavily siloed. Over time, this has resulted in cross-functional inefficiencies between and across underwriting, claims, ceded reinsurance, actuarial, and finance. In the past, investment returns may have covered the costs associated with these inefficiencies, but this is no longer possible given today's historically low interest rates. Couple this development with the surge of information that is available today and the importance of underwriting efficiently at an "information advantage" becomes clear.
Current state
Many P&C insurers are in the process of transforming, or have transformed, their policy administration, claims, billing, and financial systems, as well as their related data environments and operational processes. While there are economic and technological reasons for these transformations (e.g., record levels of policyholders' surplus across the industry, new and more robust technologies, etc.), the primary driver appears to be strategic: many P&C insurers realize that more insightful approaches to deploying capital in the highly cyclical marketplace will help them to more efficiently achieve their profit and growth goals while mitigating risks (including soft market-related risks).
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