Will Technology Keep the Good Times Rolling for P/C Insurers?

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29 December 2006


San Francisco, CA, USA January 17 2007


In a new report, , Celent identifies the specific technology tools that have contributed to the first total industry underwriting profits the property/ casualty industry has seen in almost 30 years.

The report looks at each core process area--product development, pricing, new business and underwriting, service, claims, and IT. It highlights how what an insurer does or does not do in each area impacts each component that determines underwriting profitability: premium, losses, and expenses. Celent estimates that technology accounts for 30% of the improvement in the loss ratio and 50% of the improvement in the expense ratio.

"Recent underwriting profits are the result of important changes in how the industry understands the risks it puts on its books, pays losses, and works with its customers and agents." said Donald Light, senior analyst and author of the report."

Light continued, "As the end of 2006 approaches, it looks like underwriting results will be very very good. The bigger question is what will happen to the cycle over the next several years. Will the underwriting cycle reassert itself through competitive pressure. Or just possibly, will enough companies use the available tools to keep quotes and terms aligned with what senior management wants, making the cycle as obsolete as the thought of going to Lloyds of London to order a cup of coffee?"

The 26-page report contains 11 figures and five tables. A table of contents is available online.

Members of Celent's Property/Casualty research service can download the report electronically by clicking on the icon to the left. Non-members should contact for more information.