U.S. Property and Casualty Insurance Claims Executives See a Need to Modernize and Increase Flexibility of Claims Systems,

  U.S. Property and Casualty Insurance Claims Executives See a Need to
  Modernize and Increase Flexibility of Claims Systems, According to an
  Accenture Survey

On average, insurers will spend $17.5 million on claims systems over the next
                                 three years

Business Wire

NEW YORK -- November 15, 2012

A large majority (85 percent) of claims executives at U.S. property and
casualty (P&C) insurance companies see their claims systems as lacking the
flexibility and modernity needed to address consumers’ evolving needs,
according to an Accenture (NYSE: ACN) survey of U.S. claims executives.

“Today’s digital-savvy, mobile-enabled consumers expect seamless, real-time
interaction with their service providers,”said Michael A. Costonis, a
managing director in Accenture Property and Casualty Insurance Services. “For
P&C insurers, that means reducing settlement times andenabling policyholders
to interact with them about the progress of their claims when and where they
want. A modern core claims system is essential to achieving all of these

Also according to the survey, a large majority of executives (83 percent)
believe their claims systems are not modern and flexible enough to allow them
to change the systems’ behavior and business rules without intervention from
the IT department.

“Codeless configuration is essential to any high performing claims system,”
said Costonis. “By enabling claims handlers to more quickly and easily
configure these applications, insurers can continuously improve their overall
claims processes and their service to policyholders, while reducing costs.”

Among the survey’s other findings:

  *Half (54 percent) of those surveyed say their core claims systems are more
    than five years old and almost one-third (32 percent) of respondents say
    they rely on more than five different applications to process claims.
  *More than three-quarters (78 percent) of respondents say they are on a
    path to upgrade their claims systems; among these respondents, almost
    one-third (31 percent) say the last major upgrade was made more than three
    years ago.
  *Two-thirds (66 percent) of claims executives surveyed think their claims
    systems are not optimized to collect and analyze the growing volume of
    data available - such as insights about consumers from social media and
    usage data collected by means of telemetry and Global Positioning System –
    which would enable them to refine and improve claims management.
  *More than three-quarters (78 percent) of respondents say their claims
    organization is not equipped to manage new forms and level of risks such
    as cybercrime, terrorism, increased frequency of severity of natural

“While 92 percent of the claims executives we surveyed said they could reduce
loss costs by increasing consistency in claims handling, most of them are not
in a position to do so because their core claims systems are either too old or
not adapted,” said Costonis. “While insurers are on a path to upgrade claims
systems, most companies have not done so for more than three years. This
suggests difficulties with the upgrade process, which could be alleviated
using cloud computing on a Software as a Service basis.”

Top 3 priorities for investment in claims management: core system
modernization and replacement, analytics capabilities and workforce

On average, insurers are planning to spend $17.5 million on claims systems
over the next three years, with total expenditures expected to reach more than
$2 billion within the U.S. P&C insurance industry. The top three priorities
for investment are core claims system modernization and replacement (cited by
72 percent of respondents), analytics capabilities (49 percent) and workforce
(49 percent).

The survey also reveals that almost half (48 percent) of respondents have
already started to migrate their claims systems to the cloud or on a Software
as a Service (SaaS) model, or are planning to do so in the next two years, or
are currently discussing this option.

Also according to the survey:

  *The most commonly used data are offline data, stored in Excel spreadsheets
    or Access databases, mentioned by more than three-quarters of claims
    executives surveyed.
  *Recruitment of customer service professionals or customer service training
    programs and implementation of claims mobile applications for customers
    are the two most important initiatives that claims executives are
    undertaking to better address customers’ needs, mentioned by 59 percent
    and 57 percent of respondents respectively.
  *More than two-thirds (68 percent) of claims executives surveyed say they
    are actively hiring claims professionals or are planning to do so in the
    next twelve months. Among these respondents, 26 percent are facing
    recruitment problems, particularly in hiring claims handlers (mentioned by
    88 percent of claims executives with hiring problems).

“Claims systems are central to P&C insurers’ performance but the industry
continues to struggle in this area,” said John Del Santo, global managing
director of Accenture's Insurance practice. “There is significant potential
for improvements, particularly in the areas of loss cost management and
expense efficiency. Doing so will require a highly coordinated approach to
claims operating models, focusing on people, processes and technologies.”

The survey was initiated by Accenture Property & Casualty Insurance Services
to better understand the business challenges and investment priorities of U.S.
claims executives, and the enhancements to core claims processes and systems
that they believe are needed. Accenture Property & Casualty Insurance Services
serves more than 70 P&C insurance clients worldwide, including the claims
organizations at many of these insurers.


Accenture commissioned a survey of 50 U.S. P&C insurers. Respondents were
C-level claims executives, including Heads of Claims, Vice Presidents of
Claims and Claims Supervisors. Interviews were conducted by telephone in March
and April 2012. Among companies participating, 16 had net premiums written
(NPW) of more than $1 billion; 9 had NPW of $500 million to $999 million; and
25 had NPW of $100 million to $499 million.

About Accenture

Accenture is a global management consulting, technology services and
outsourcing company, with 257,000 people serving clients in more than 120
countries. Combining unparalleled experience, comprehensive capabilities
across all industries and business functions, and extensive research on the
world’s most successful companies, Accenture collaborates with clients to help
them become high-performance businesses and governments. The company generated
net revenues of US$27.9billion for the fiscal year ended Aug. 31, 2012. Its
home page is www.accenture.com.


Francois Luu, + 33 6 60 53 84 28
Sean Conway, + 917 452 6444
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