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property and casualty

Executive Viewpoint | Accelerating Digital in P&C Insurance to Weather the Perfect Storm of Uncertainties

By | Executive Viewpoints

Accelerating Digital in P&C Insurance to Weather the Perfect Storm of Uncertainties

An Executive Viewpoint

P&C Insurance digital trends and insurtech

Introduction

The Property and Casualty (P&C) insurance industry is in the midst of a perfect storm of challenges. Low profitability has been prevalent, particularly in the last several years. The rise of emerging insurance technology companies is creating steep, agile competition. Geopolitical unrest – such as Brexit and the Trump administration’s proposed policy changes to the H1-B visa program, deregulation, and tax cuts – is causing significant uncertainty in the P&C insurance industry. The evolution of the customer base and their demands for access, communication, and new offerings through multiple channels and technologies will require dramatic changes to the way P&C insurers deliver services. And although business and IT support services in the P&C insurance industry are mature, optimizing operations continues to be an ongoing challenge.

But P&C insurers can turn this gloomy picture into blue skies of near- and long-term value by accelerating implementation and adoption of digital technology, in particular analytics, automation, and advanced IT.

This executive viewpoint provides an overview of the challenges and risks P&C insurers face today and explores several critical areas that will allow them to weather the storm of uncertainty and create a competitive edge.

Barbara Beller

Barbara Beller
Associate Partner
Contact Barbara Beller
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Game on in P&C Insurance! Genpact Acquires BrightClaim | Sherpas in Blue Shirts

By | Banking, Financial Services & Insurance, Blog, Mergers & Acquisitions

Challenging macroeconomic conditions, demanding digitally-savvy consumers, and rising fraud are pushing P&C insurance carriers to be more demanding than ever of their service providers. Carriers not only expect optimization of cost of insurance operations, but also assistance in gaining and retaining market and customer mind share. This is forcing service providers’ hand to move from an arbitrage-first to a digital-first model.

Meanwhile, insurance BPO service providers’ origins in the arbitrage-first world and their strategic choices in large P&C product categories, such as personal lines, worked well for a while. But with the U.S. and U.K. markets maturing, service providers are being forced to reconsider their strategy. They now not only need to focus on the customer experience, their digital footprint, and lowering TCO, but also on developing deeper domain expertise to drive growth and remain differentiated in the market.

As we talked about in our report, “Property and Casualty Insurance BPO – Annual Report 2016: The Dawn of Transformational Era – Adapt and Evolve to Succeed,” this leaves them with three options to avoid falling into the no-growth trap:

  • Develop capabilities in judgment-intensive processes (i.e., trod the path taken by Third-Party Administrators, or TPAs)
  • Take the plunge to develop capabilities for handling more “exotic” P&C product categories (such as insurance of dump trucks!)
  • Explore under-penetrated (emerging) markets

Genpact (a Leader on Everest Group’s P&C insurance BPO PEAK Matrix-2017) clearly decided to pull the trigger on this conundrum, announcing on 3 May that it had acquired BrightClaim. BrightClaim’s suite of services includes property claims management (including catastrophe claims), claims adjusting, TPA services, and contents pricing services.

With this acquisition, Genpact has gained deeper domain expertise in U.S. P&C insurance claims market, and has strengthened its portfolio of digital technologies and fraud detection capabilities.

The acquisition also includes National Vendor, a BrightClaim associated company, which has a nationwide network of contractors and offers carriers a direct repair program along with content fulfillment. Genpact can leverage this to provide cost-effective and faster claims settlement services, which is expected not only to reduce claims payouts for insurers, but also to improve the customer experience.

Genpact’s top competitors in the U.S. P&C market are Cognizant and EXL. With both of them continuing to augment their capabilities and developing deep domain expertise, it was imperative for Genpact to make a move. As a favorable by-product of this acquisition, Genpact has further strengthened its onshore delivery capability with centers in Atlanta, GA and Austin, TX.

Prima facie, the deal looks accretive and has the potential to enable Genpact to challenge other Leaders in P&C insurance BPO space.

How will other providers in this segment respond? Game on! We’d say….