Indemnity Spending in UK Property Insurance: Is This a Missed Opportunity?

by Catherine Stagg-Macey, January 12, 2010
Industry Trends
EMEA

Abstract

In the current economic climate, property insurers are looking for ways to better manage indemnity spending. Point solutions may hold the answer to this problem.

Property insurance is the second largest sector in the UK general insurance market and has seen steady growth in premiums for several years. However, claims and expenses are also rising and will continue to erode the underwriting profits of insurers that do not have a tight handle on these outgoings. In a new report, Indemnity Spending in UK Property Insurance, Celent looks at some of the challenges facing the sector, and how technology can support tighter control over indemnity spending.
 
"Using technology, an insurer can anchor the claim at the point of FNOL, improving fairness, accuracy, speed and consistency of claims. The claim handler can make better decisions about fulfillment choices according to the insurer’s strategies," says Catherine Stagg-Macey, senior analyst with Celent's Insurance Group and author of the report. “These are precisely the types of improvements insurers need to seek in the coming years to protect their property book."

This report explores challenges facing the sector and the shortcomings of the current claims process. In addition, the report reviews two property estimation vendors and their tools available in the UK: Innovation Group (Triage and Symbility.NET) and Xactware (Xactimate and Xactanalysis). Finally, the report expands on the business benefits of leveraging this technology in the claims area of property insurers.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

An Overview of Property Insurance

4

 

Underwriting Profitability Under Threat

5

 

Other Challenges

6

Managing Indemnity Spending

9

 

A Process Overview

9

 

The Trend for Cash Settlement

9

Leveraging Technology

11

 

Innovation Group: Triage and Symbility.NET

11

 

Xactware: Xactimate

13

Final Thoughts

15

Leveraging Celent’s Expertise

17

 

Support for Financial Institutions

17

 

Support for Vendors

17

Related Celent Research

18

Sign in to download reports and access personalized information