Capgemini and Efma 2011 World Insurance Report Finds Investing in Claims Transformation Drives Growth for Insurers

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Paris, January 18, 2011 – The 2011 World Insurance Report explores ways insurers can dissect their business to identify opportunities that will make fundamental and lasting improvements to their core operations, with a focus on enhancements to claims transformation. The report draws on research insights from 14 countries – including Belgium, Canada, Denmark, France, Germany, India, Italy, the Netherlands, Norway, Sweden, Spain, Switzerland, the U.K. and U.S. – and covers both non-life (including health) and life insurance segments. Based on a comprehensive body of research it includes in-depth focus interviews and extensive surveys with 58 insurance executives.

“By the second half of 2009, the economy had started to improve but many insurers were still faced with the challenge of meeting their financial obligations despite losses in investment income, increases in premiums, and other less than ideal operating conditions,” said Jean Lassignardie, vice president, sales and marketing for Capgemini’s Financial Services Global Business Unit. “The financial crisis is a stark reminder for insurers that they cannot rely on investment income alone to deliver results. Instead, to achieve sustained growth, they must also re-focus on core drivers of operational excellence.”

The report makes clear five key conclusions regarding the need for insurers to:

  1. Transform claims to meet customer needs while driving results
  2. Stabilize reliable claims processing platforms
  3. Manage indemnity expenses more effectively
  4. Leverage claims data for enterprise-level decision making
  5. Ensure critical business agility especially if seeking to thrive long term

Insurers Need to Transform Claims to Meet Brand Promise to Customers while Driving Results
With a less-than-satisfactory claims experience prompting one-in-five customers to switch insurance providers, claims transformation is where many insurers, especially non-life insurers, are finding both operational efficiency improvements and the tangible substantiation of their brand platform necessary to deliver on customer commitments.

According to the 2011 World Insurance Report, opportunities exist for non-life insurers to capture operational efficiencies in claims, where costs are rising fast. In fact, from 2006 to 2009, the claims ratio rose in nearly every country (except the Netherlands) and outpaced the expense ratio at a greater rate of 4.6 percent to 0.3 percent (acquisition plus operational).

Inefficiencies – stemming from environmental, technical and organizational factors – are all driving the imperative to transform claims processing. While the potential for driving efficiency varies by firm strategy, country and service segment, within claims, three areas can have immediate impact on achieving efficiency. They include: creating a reliable, predictable claims processing platform, managing indemnity expenses to the right levels and leveraging claims data for enterprise decision-making.

Stabilizing Reliable Claims Processing Platforms: Insurers should implement and stabilize a reliable claims platform that leverages technology to enable integrated claims processing, enhance process efficiency and cost effectiveness, reduce cycle times, and allow performance measurement. By closing process gaps, insurers should be able to reduce existing loss-adjustment expenses and drive continued improvements.

Managing Indemnity Expenses: While much attention is paid to the cost of paying and administering claims, there is also a significant need for insurers to tackle contingent liabilities (for example, overpayments in vendor transactions or suboptimal recovery practices). Insurers should optimize fraud management to reduce costs (and ultimately improve combined ratios) by making sure fraud is detected quickly and effectively, without undermining customer satisfaction or unduly raising litigation costs or creating net new costs.

Leveraging Claims Data for Enterprise-Level Decision Making: For an insurer, the ideal business information system makes efficient use of enterprise-wide data to support business decisions. Insurers need to leverage the full value of claims data by making sure the right data is captured and used to support business decisions, delivering benefits in terms of profitability, efficiency, strategic planning, and regulatory compliance.

Ultimately, in an intensely competitive insurance market, differentiation through innovative claims management practices is going to be the most important and effective way to maintain market share and profitability. Claims transformation not only improves everyday efficiency and effectiveness, it also enables insurers to deliver on their brand promise and enhance brand value for the long term. It can help drive top-line and bottom-line growth by improving client acquisition, client retention, procedural efficiency and effectiveness, and risk management. Without it, insurers will be challenged to differentiate themselves and maintain and evolve their market position.

Business Agility Is Critical for Insurers Seeking to Thrive Long Term
With insurers seeing continued shifts in regulation, customer preferences and technology, they also must demonstrate agility in adapting to conditions effectively if they are to solidify customer relationships and achieve sustained results.

Using its proprietary Business Agility Maturity Model,2 Capgemini assessed the degree to which insurers are agile in various elements of the insurance value chain, such as claims, as well as product design, front office, and policy administration/underwriting. The report found that although agility depends in part on a firm’s business line, insurers can be highly successful by targeting agility in just a few key areas. For example, claims agility is most relevant to non-life insurers, while front-office activities are equally pertinent to life, health, and non-life businesses.

The model also showed a distinct pattern linking the scale, region, line of business, business strategy and corporate structure of a firm to the maturity of claims agility, as well as other areas of the value chain such as front-office agility. For example, large insurers perform relatively better on agility related to centralization and scalability, and demonstrate low to average maturity in areas related to synchronization and personalization. Small and mediumsized insurers are generally highly agile in areas that impact customer-service levels.

For more information about the 2011 World Insurance Report, please visit /wir11.

About Capgemini
Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, enables its clients to transform and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working, the Collaborative Business ExperienceTM. The Group relies on its global delivery model called Rightshore®, which aims to get the right balance of the best talent from multiple locations, working as one team to create and deliver the optimum solution for clients. Present in more than 35 countries, Capgemini reported 2009 global revenues of EUR 8.4 billion and employs over 100,000 people worldwide.
More information is available at

About Capgemini’s Financial Services Global Business Unit
Capgemini’s Financial Services Global Business Unit brings deep industry experience, innovative service offerings and next generation global delivery to serve the financial services industry. With a network of 17,000 professionals serving over 900 clients worldwide, Capgemini collaborates with leading banks, insurers and capital market companies to deliver business and IT solutions and thought leadership which create tangible value.
More information is available at

Rightshore®is a trademark belonging to Capgemini.

About the European financial marketing association
The European financial marketing association has been an unfailing observer of the numerous transformations that the retail financial services sector has experienced over the years and has demonstrated its ongoing commitment to providing a forum for professionals from the sector. Formed in 1971 by bankers and insurers to encourage their colleagues to share experiences, promote the best practices of their institution and collaborate through alliances and partnerships, today the non-profit association’s members include over 80 per cent of Europe’s largest retail financial institutions.

Through regular events, publications, and its comprehensive website, the association provides retail financial service professionals with answers to their questions about the main issues at stake in their business: multidistribution strategies, customer approaches, product and service marketing, risk management or operational excellence, to name a few.

Efma is above all a dynamic association, providing a great opportunity for discussion and exchanges without any commercial constraints. For the past 40 years, the loyalty of its members as well as their permanent financial support are the best proof of its efficiency.

1 Business agility is the ability to identify, anticipate and respond to specific changes in operating conditions that directly impact an insurer’s ability to achieve sustained performance.

2 Capgemini’s proprietary Business Agility Maturity Model gauges the degree to which insurers are agile (their “maturity” in terms of agility) in certain elements of the value chain.

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