Potential (Perfect) storm brewing for insurance companies

Over the past month there has been an increased media coverage surrounding the potential storm brewing in the insurance industry. 

Adding fuel to these stories are huge profit downgrades from the large insurance companies. AMP recently stated that its fourth-quarter earnings could take a hit of up $65 million.

This has been largely due to:

• Significant rises in income protection and Total and Permanent Disability (TPD) claims as a result of greater acceptability and prevalence of stress and mental illness

• Growing presence of no win no fee lawyers

• Policy terminations due to the ageing population and tough economy.

It is uncertain as to what lies ahead, which is concerning many of the big players.

High end advisers are being engaged to find solutions to these significant threats.

So what can be done quickly to minimise the impact of this situation? 

The more progressive insurance companies we are talking with are seeking to address costly inefficiencies associated with the more complex claims processes such as income protection and TPD. 

Through our engagements we are observing:

• Transformation projects are underway to implement claims systems and other disruptive technologies to evolve 

• Claims processing need to speed up to cope with demand and address servicing of unnecessary claims

• Inefficient paper based practices being replaced with solutions to streamline processes, focused on the end customer

• Termination of policies could be addressed through improving communication and service to the customer.

If you're a progressive company who wants to ride ahead of the storm, feel free to contact us.