Is the sustainability of the insurance sector under threat?

With Heads of major insurance companies voicing their concerns in the media recently, you might be left wondering what is happening in the insurance industry. 

According to the Australian Financial Review, Global re-insurer Reinsurance Group of America reported a loss of $300 million in the Australian life insurance market in the three months ended June 30, 2013. 

As a result it suspended all new group Total and Permanent Disability (TPD) business indefinitely on the basis that the market 'was not stable'. 

Certainly alarming figures and statements.

Other relevant points around causes:

• Claims are souring largely due to an increase in stress related illness such as mental health and back pain
• A weaker economy has contributed to high stress and depression
• The greatest majority of claims are being made by higher income, white collar workers
• People cancelling their policies has increased 20% a year over the last four years, due to financial stresses and fee increases of up to 10% per year for people over 40 (Source: Australian Financial Review).

Insurance companies are looking for solutions to address this dire situation. 

Solution for the insurance sector = innovative, central communications platform

Not much can be done about the volume of claims being lodged, however there are solutions that can be implemented quickly to reduce the time to process claims.

Additionally, insurers need to identify where claims officers are spending their time to reduce time spent on tedious administration and refocus their efforts on addressing questionable claims, quickly resolving valid claims and freeing up significant reserve capital.

A central communications platform that facilitates communication to all entities relevant to a claim external to the Insurance companies' claim system is one quick way to initiate this turn around quickly. 

Such innovative solutions are already positively addressing similar problems in other industries, such as Human Resources.

Insurance companies should not delay making decisions. New low risk solutions that leverage cloud based technology can be up and running within months.

For a free report that suggests low risk, affordable solutions to these challenges in more detail, contact Affirm on info@affirmsoftware.com.au and request Affirm's insurance whitepaper.