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Technology does not merely perform a business support function but is also a business enabler and its presence is palpable in human resources, claims management, customer service management, underwriting, reinsurance, management information systems, personal management and risk & compliance. Technology is in a constant state of transition and today's technology could be obsolete tomorrow. To that end, insurance companies have to go that extra mile to ensure that they are always aligned and up to speed with the latest technological advancements in the industry. Besides being quick to embrace new technology, recognising the right technology will also be essential to stay competitive. Increased investments in new technological capabilities will help insurers sustain high performance levels even in vacillating markets.
The internet is emerging as an indispensable medium for marketing and claims management. Mobile computing, imaging and workflow automation are now being increasingly used by insurance companies in their relentless efforts to ensure superior customer service, policy and claims processing. These technologies are also crucial for the business to expand its reach and distribution network.
Today, some of major challenges faced by the insurance companies are product innovation, dynamic portfolio management in line with insurance cycle movements, support for pan-India distribution and fulfilment capability and process improvements with STP (straight through processing) and seamless integration with third parties and service providers. Insurance budgets have been steadily increasing because senior managers in the Indian insurance industry are well aware of the pivotal role of technology as an enabler that drives business value. BI (business intelligence), analytics, risk management, fraud early warning systems (FEWs) and CRM (customer relationship management) tools are being extensively utilised to help insurance firms manage its portfolio and also segment and track customer behaviour which also includes their investment and spending patterns.
It is estimated the IT spend by insurance companies will witness an exponential growth, crossing $9 billion by 2012. This investment would be essential by the industry to stay competitive and will be driven by not only technology trends but also by industry and economy trends.
Of late, there has been a buzz about the role that cloud computing will play in the insurance industry in the future. A prominent insurance industry-focused technology journal recently identified cloud computing and SaaS-based software models as technology solutions that would play a crucial role in the industry in the near future although there are some concerns about the ability of these solutions to protect data privacy and organisational requirements. Information and communication are the lifeblood of the insurance industry and social networking sites like Facebook, LinkedIn etc. are expected to take the industry the next level. To that end, technologies that enable social networking such as web 2.0 will be adopted by the industry constantly looking outside their traditional products and markets for a sustained and profitable growth in the face of intensely competitive markets.
Source: The author is MD of Royal Sundaram Alliance Insurance.
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