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From
January 2009 Resource
Industry
Partners Look at the Issues
Several industry partners and
suppliers commented on the 2009 Forecast for the Insurance Industry. The economy
is hurting, but insurance leaders should focus on the opportunities, the
partners say. Here are their comments:
Focus on Future
By Ross Orrett
President & CEO
Camilion Solutions Inc.
Life & Annuity (L&A)
insurers are preparing themselves for an immediate future that looks tough at
best. The combination of shrinking investment dollars and decreased market
demand due to eroding consumer confidence and the reality, or prospect of, less
disposable consumer income is creating a difficult market. However, true leaders
will not be shortsighted in terms of emerging and future opportunities. The 76
million baby boomers retiring in the next 25 years, and the increasing number of
unemployed, those who have previously enjoyed the benefits of company sponsored
retirements and life coverage, will be looking to insurers for competitively
priced, innovative products.
In 2009, leading L&A insurers
will not reduce their IT spending. Instead, they will ensure that it is focused
on strategic initiatives that capitalize on the new opportunities presenting
themselves and will adopt core enabling technologies that will have the greatest
impact on their ability to retain or create competitive leadership.
L &A insurers will be forced
to be much more customer and product-centric, two concepts that go hand-in-hand.
Understanding the needs of specific customer segments using business
intelligence tools, and developing products that meet their needs in a timely
manner using sophisticated product development solutions that include
functionality for content development, process management and measurement, is
the logical, indeed the only path an L&A insurer can take for long term
success Having innovative, customer-driven products that align with a strong
brand image will be the key to addressing the erosion of consumer confidence.
However, insurers must look past the traditional enabling technologies. These
approaches to product development, where software releases cannot keep pace with
the demands of product development, must be replaced with standalone solutions
where all product data and rules are stored in a central repository for easy
re-use and where products can be configured, outside of IT - in weeks not
months.
Visit: www.camilion.com, phone
1.866.226.4546.
Business Goes On
By David E. Coons
Senior Vice President
The Jacobson Group
It’s no secret that we are
facing uncertain economic times. Slower sales growth, increased investor
pressure and tighter expense controls mean many companies must learn how to do
more with (or for) less.
In addition to mounting economic
pressures, many organizations may find themselves faced with hiring freezes,
incapable of supporting full-time staff, or even unable to attract engaged
talent away from their current positions or employers. Nevertheless, workloads
remain unchanged. Companies still need to address special projects and other
critical business problems that can’t wait for the economy to improve. Simply
put – the business of doing business goes on. That’s why many are turning to
interim consultants for help.
In fact, subject matter experts
are in greater demand than ever before. The Bureau of Labor Statistics’
November employment report highlights one bright spot economy-wide: part-time
work. The number of part-time workers has increased by 2.8 million during the
past 12 months. Undoubtedly, this number is largely influenced by minimum wage
workers. However, even at the executive levels, more and more professionals in
the insurance space are looking for full-time employment but are willing to
accept interim assignments as well. For them, it is the business of living. Even
if they can’t find full-time work locally and are unable to relocate due to
the housing market or a spouse’s career or even if they are unable to retire
because their nest egg has suffered a major loss, life goes on.
This work/life balance situation
supports the industry’s demand for consultant-level contract talent. Insurance
organizations receive the experience and functional expertise necessary to
successfully address their special projects and other interim needs, while
senior-level professionals maintain meaningful careers. It’s a win-win.
David E. Coons is Senior Vice President of
The Jacobson Group, a national professional and human capital services firm
providing executive search, professional recruiting and temporary talent
solutions to the insurance industry. Coons leads the firm’s subject matter
expert division, which provides senior-level talent on a contract basis. He can
be reached at (800) 466-1578 or dcoons@jacobsononline.com.
Real-Time
Underwriting
By Jym Barnes
President and CEO
RGA Technology Partners, Inc.
Here we are at the beginning of
2009 and we find many insurers looking outside of their standard processes to
bring in business. We are seeing a host of progressive organizations ask about
what they can do to quickly expand their offerings to a new market segment
without incurring a tremendous amount of risk.
In the coming year, I believe we
will see an increase in the use of a new type of "Simplified Issue" (SI)
product that uses real time underwriting. On the front end, they are most often
sold direct via website or direct mail, or through another type of agent/broker.
But on the back end is where the genius really happens -- reducing the
complexity of development, underwriting and issuing policies. Using
pharmaceutical records, MIB and MVR records and the right set of reflexive
questions, these products cut out many of the traditional underwriting hoops
such as blood tests and doctor reports. The underwriting can often be done
real-time during tele-interviews, or while the applicant is online. The products
are geared to be sold in the middle market, approved quickly and added to the
books. This method should also improve an insurer’s pricing model. In a year
of financial uncertainty, real-time SI products may be the quickest, most
cost-effective way that an insurer can increase market share and bring in more
premiums.
Almost any insurer can add these
products to their portfolio using new technologies in automated underwriting.
But then there is the issue of risk. This kind of business can substantially
increase risk if not done properly. Carriers will be looking to reinsurers for
support with product development and reinsurance treaties tied to automated
underwriting. Reinsurers will be helping insurers manage their risk by adjusting
their rules sets to match the market and medical trends. If carriers approach
2009 the right way, they could find themselves getting the best of both worlds:
new blocks of business during a recession without the tremendous risk normally
associated with reaching new markets.
Visit RGA at: www.rgatp.com
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