Global Operations (IGO), a solution provider of core processing
systems for the P&C and Life insurance markets, today announced the
results of its industry research focused on core insurance processing
systems in the US. Two hundred P&C and Group Life carriers were surveyed
via phone interviews with questions focused on numbers, satisfaction
levels, and ages of existing claims and policy administration systems,
along with system and organizational challenges and planned initiatives.
A total of 123 P&C carriers and 77 Group Life carriers participated in
the survey, which was performed by an independent third-party market
research organization. IGO chose to survey both P&C and Group Life
carriers to validate its assumption that satisfaction levels,
challenges, and initiatives were similar between the market segments--
even given the differing lines of business, existing core systems, and
functionality and processing needs.
Although carriers have made heavy investments in core legacy replacement
initiatives over the past decade, the research results show a continued
heavy reliance on in-house developed systems, with Group Life carriers
reporting more than 75% of core systems as in-house/homegrown compared
to P&C carriers at over 55%. Other survey results were relatively
consistent between the P&C and Group Life carrier segments.
Other highlights from the policy and claims administration systems
research results include:
More than 50% cite legacy systems as the top core system challenge,
followed by integration and scalability/flexibility issues;
Over 40% of the carriers rate their satisfaction with their systems a
"C" or below, based on an A to F grading scale;
63% have one or more core system at least 11 years old, with 18%
reporting systems older than 25 years;
The most significant business issues included 31% challenged to
deliver speed to market, 30% dealing with slow manual processing, and
23% unable to meet deadlines.
These system challenges are driving companies to replace or augment
their core systems, with more than 50% saying they had budgeted
initiatives in the next 12-18 months. Those with planned initiatives
over the next year, include 40 companies investing in new or replacement
policy systems, 35 in new or replacement claims systems, and 11 in new
end-to-end core processing systems.
Commenting on the research, Chad Hersh, Managing Director of Novarica's
insurance practice, said, "These types of numbers make it no surprise
that new, modern solutions like IGO6 are starting to crop up in the
policy admin space. The survey certainly validates what we've found both
in our surveys and in our dealings with carriers over the last year. Not
only are carriers planning for core systems replacement projects, but
budgeting for them as well. Other results are less surprising: Carriers
have major challenges with multiple homegrown, legacy, COBOL solutions
and need to find a solution."
"We thank the 200 carriers for taking the time and effort to participate
in our recent research. While we can make assumptions about insurance
markets, needs, and priorities, getting the validation from the carriers
themselves really gives us the pulse of the industry and helps us better
understand how to best serve both P&C and Group Life carriers,"
commented Didier Lamour, IGO's US CEO. "With the large percentage of
in-house developed systems still in use, it's no wonder there is a
tremendous amount of COBOL code combined with the lack of automation,
integration, flexibility, and scalability resulting in significant
challenges for carriers."
Lamour continued, "As satisfaction levels with legacy systems continue
to decline and the industry confidence continues to grow relative to new
and modern core processing systems, we expect to see an accelerated
shift from the old to the new. No one ever said replacing legacy core
systems was an easy effort, but with each success comes new lessons and
new opportunities. We look forward to IGO being a part of many of those
new system and legacy replacement success stories."
To view the results of the survey, please go to: http://www.igo6.com/2013InsuranceIndustrySurveyResults
About Insurance Global Operations (IGO)
IGO is a new breed of software provider delivering on its vision to
change the status quo of insurance administration systems through the
disruptive application of technology. IGO designs and develops its
insurance solutions with the goal of helping carriers face the growing
P&L pressures from increasing regulations and little return on assets.
IGO understands that with these challenges comes the need for P&C and
Life carriers to find a new way of processing that goes beyond claims,
billing, and policy administration. IGO is headquartered in Minneapolis
with offices in Paris, New York and Tunis. For additional information on
IGO and IGO6 visit www.insuranceglobaloperations.com
or call (817) 307-3256.
Insurance Global Operations