Challenges in Leveraging Bureau-Based Content

Carriers are overrun with the administrative forms required to sell and service their products. A recent Celent survey suggests that, for insurers, the amount of form customization rarely matches the amount called for by the business strategy. This disconnect increases the analytical challenges on pricing and underwriting, makes marketing more difficult, and drives up costs.

In a new report, , Celent advises carriers to carefully assess their competitive approach and explicitly outline their forms strategies. This report examines several key questions:

• What is the current state of play in using bureau-based administrative forms?
• What is the context for use of bureau-provided content, such as policy forms, rates, rules, and forms?
• How can companies best balance the efficiencies gained through use of standardized content with the value from product differentiation?

Companies responding to the survey were North American enterprises engaged in property/casualty, life, and multi-line distribution. Many characteristics of their forms management approach were common across the group, including the following:

• Forms are being created three times faster than they are being retired.
• Two-thirds of panel respondents said that, by the time they are done, virtually everything about a typical product is customized.
• Panelists said that the biggest drawback of heavy customization is the effort required to keep up with changes to standardized content. However, "going it alone" without any use of bureau content would put most companies at a severe expense disadvantage relative to their competitors.

To improve the alignment of business strategy with forms maintenance, actionable suggestions are made in three focus areas...market development, product creation, and product maintenance. "The suboptimal use of forms and standardized content results from the reuse of traditional approaches and technology, whereas a deliberate strategy could enable vast improvements," says Craig Weber, senior vice president with Celent’s insurance practice and co-author of the report.

Mike Fitzgerald, coauthor of the report, comments: "Given the current market disruption, regulation is likely to increase. Carriers realizing any type of efficiencies in the speed and quality of forms compliance will benefit exponentially."

The report is 26 pages and contains 15 figures and nine tables. A table of contents is available online.

Members of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.