High operating expenses, shrinking premiums, and low interest rates have become harsh realities for US life insurers. Many organizations have done everything possible to avoid major systems upgrades through the years. After decades of scrimping on IT, life insurers realize they can no longer put off modernizing their systems—especially claims processing. The cost of a complete policy administration replacement is out of reach for most organizations. For many insurers, the most viable option is to focus on transforming claims.
Aite Group recently evaluated the market for stand-alone claims systems. Aite Group, a global research and advisory firm specializing in the financial services industry, assessed North American tech vendors and their solutions. Their comprehensive analysis is based on vendor stability, client strength, product features, and client services.
The Oracle/Equisoft partnership, which uses Oracle Insurance Policy Administration as the core system, took the lead position. According to Aite Group:
Oracle and Equisoft bring together extensive strengths that offer carriers a very tailored and flexible claims system . . . The analytical components and capabilities, rules engine, and workflow Oracle provides in the core system create efficiencies that enable life insurance carriers the opportunity to be lean. In addition to the configurability that Equisoft provides, giving the carrier a solution that fits its specific needs, the digital capabilities help prepare carriers for the future they have not yet considered.
In addition to evaluating the stand-alone claims systems, the report defines the top IT priorities for North American life insurers. The report will likely spur insurance executives to delve more deeply into lean principles. How can life insurers go lean internally while improving the customer experience and preparing for the future?
Since 2014, premiums for US life insurers have fallen at an average annual rate of 4 percent, according to Bain. The industry’s return on equity has been flat. And unrelenting low interest rates aren’t making things easier. The uphill challenges are pushing life insurers to be more aggressive about eliminating waste and optimizing efficiencies wherever possible.
In life insurance, there’s no need to dedicate human labor to process routine claims. Manual, paper-based processes are the antithesis to lean business. Oracle/Equisoft’s solution automates the claims process and radically speeds up the entire process. Insurers reduce operating costs and beneficiaries receive their payouts much faster.
The right claims processing system can transform business through stand-out customer experience and optimized operations. Here are some highlights of the Oracle/Equisoft solution that drew unparallelled recognition in the Aite Group report:
Preparing for the future and optimizing operations will always be top priorities for life insurance companies. While tight economic conditions have led many insurers to avoid systems upgrades, more leaders are discovering viable solutions to transforming the claims process.
Read Aite Group’s life insurance industry report: