insurance industry Archives - SpendEdge

Tag: insurance industry

retail supply chain

Key Approaches to Address Disruptions in the US Health Insurance Industry

How should companies respond to the disruptive forces buffeting the health insurance industry? This remains a valid question considering the scores of industries that have been shaken by disruptive innovation in the past. It comes from outside with radically different approaches and the majority of established incumbents struggle to respond. They are underpinned by cost-benefit and risk-return calculations that subsequently prove to be flawed. According to a study, core risks in the health insurance business include, ” underwriting, credit, market, operational, liquidity risks, etc.” Customer services come to the forefront of a risk assessment and firms must have a way to categorize, prioritize, and escalate incidents across teams. They should centralize and identify trends the customer feedback and implement controls to address those trends. In this article, we present approaches that companies in the health insurance industry can adopt to respond to these changes.

Want to know about strategies adopted by companies in the health insurance industry to address risks and pressures on underwriting? Request a free proposal and we will get back to you with detailed insights to develop effective health insurance plans. 

 

Ways to Address Disruptions in the US Health Insurance Industry 

The fundamental approach 

Instead of positioning insurance as a traditional one-year contractual relationship, companies should consider building a long-term collaborative relationship with customers. They should provide economic incentives to customers to stay with the program for multiple years in the form of rebate checks or a multi-year contract with an early termination policy. Premiums should be raised steadily to sustain customers in the program for the long haul. However, this model will require companies to assemble a consortium of partners with complementary assets and skills, numerous device and app manufacturers who can work on technologies for monitoring patients, tracking outcomes and influencing behaviors. But this would also enable companies to create a state-of-the-art database with information and capabilities that simply don’t exist in today’s health systems and develop strategies for robust security and privacy.

Wondering how an understanding of customers’ behaviors and risk factors can help health insurance companies to build a long-term collaborative relationship with customers?

Reach out to our experts for insights into the competitive strategies adopted by health insurance companies.  

Adopt the right metrics to tap the market in the US 

Metrics matter. Companies in the health insurance industry should make comparisons based on the right contrafactual. They must develop forecasts using what-if scenarios rather than assuming that revenue streams from existing approaches will continue indefinitely in the face of market disruption. Creating and delivering value for customers in new ways will allow the profits to flow typically.

Organizations should build models that can expand access and create new insurance exchanges for individuals to buy coverage. Because of the restrictions imposed by the ACA’s risk adjustment provisions, the product shouldn’t be targeted to younger demographic and marketed broadly to all age groups. Data monetization will still remain unaffected by the ACA medical loss ratio and risk adjustment provisions.

Inability to create models that can expand access can impact the profit margins of health insurance companies. Give SpendEdge a try by requesting a free demo of our procurement platform and gain exclusive access to 1000+ reports. 

Create a learning map 

Companies in the health insurance industry often feel reluctant while considering investments in disruptive new approaches. They consider it inherently risky as disrupting one’s business models is a significant change. Adopting a pilot-based approach can be a critical tool for companies. They can list capability gaps that need to be filled. Companies can even develop a sequence of pilots that serve as demonstration projects to develop key skills and answer mandatory questions. Also, they can focus on a local patient population and then expand demonstration projects in other geographies. 

Willing to explore other models to respond to disruptive challenges in the health insurance industry? Request for more information to devise effective health insurance plans. 

travel insurance

Procurement Challenges Facing the Travel Insurance Industry

Travel Insurance Industry Overview

Owing to the rise in spend on business travel by corporate buyers, the spend momentum of the travel industry has increased substantially. The industry is predicted to grow at a CAGR of over 5% between 2018-2023. The business travelers’ segment holds the largest share in the revenue generation of the industry and North America and APAC are among the dominating regions. Increasing number of business travelers from the corporate sector and rising popularity of online booking channels are creating demand for travel insurance policies, thereby boosting the revenue growth of the travel insurance industry.

However, amid increasing spend momentum, technologies, government regulations, relative prices, and market dynamics, the task of strategic planning and analysis in the travel insurance industry has become increasingly fraught with uncertainty. Insurance companies must prepare for the most fundamental transformations that their industry has ever witnessed.

Want to gain a comprehensive overview of the factors influencing the travel Insurance Industry? Request a free proposal and we will get back to you in 48 hours.

Challenges Facing the Travel Insurance Industry

Changing regulatory norms

With travel insurance getting popular, jurisdictions are having a close watch on the policies. This increased scrutiny has compelled companies to either enter into regulatory settlement agreements with various Departments of Insurance or to leave the market entirely. NAIC, a standard-setting and regulatory support organization created and governed by the chief insurance regulators from 50 different states also has a travel insurance working group that has drafted a new model law known as the “Travel Insurance Model Act.” The Act promotes public welfare by creating a comprehensive legal framework within which Travel Insurance may be sold in this state. Such legal frameworks will require companies to take a closer look at the entire scope of travel insurance line of business.

Procuring insurance data

For many insurance sectors, data reporting requirements are established. This results in a level of uniformity in how data elements are considered and captured and also facilitates doing analysis at an industry level. The travel insurance industry doesn’t have such structure or reporting requirements. This results in less visibility into the insurance market size and performance. Also, the exposure is not pre-defined among companies. It varies among coverages in a travel insurance policy. Many times, the policy is quoted at a composite price (e.g., percentage of trip cost) for convenience. This can create challenges for insurers analyzing travel insurance data for coverages with exposures that don’t typically vary with trip cost. There are certain data capture limitations as the data collected about the risk may not be as detailed or complete as is seen in other lines of insurance. 

Wondering how you can gain actionable insights required for developing effective travel insurance policies and gain a competitive edge in the market?

Reach to out experts for specific insights.  

Classification of risks

The key aim of risk classification is to segment insureds into groups with similar exposure. It can be done based on many different criteria and policyholder characteristics. However, most criteria used to classify risks for travel insurance differ by the coverage they offer and characteristics of the trip. Some most common risk classification criteria prevalent in the travel insurance industry are mentioned below: 

Length of the trip: The exposure to loss for emergency coverage increases with trip length. Insureds traveling on trips of longer duration may be charges comparatively higher than travelers on short trips.

Destination: It plays a key role in exposure to loss. Destinations that require multiple flight connections may increase the exposure to travel delays or baggage delays. 

Departure time: Insurers may group insureds by departure month and charge more for trip cancellation coverage as exposure to trip cancellation losses varies due to weather. 

Identifying the potential for correlation between risk characteristics in travel insurance is crucial for companies to evaluate risks and minimize exposure to loss.

Inability to classify risks can lead potential risks and ineffective risk mitigation strategies. Stay a step ahead by requesting a free demo of our procurement platform and gain exclusive travel insurance industry insights from procurement experts. 

Creating a digital loop

Month-to-month expense variations, variation in exposure to loss coupled with long-term contracts makes it difficult for the companies in the travel insurance industry to minimize spend. They require a solution that can convert static documents into data points and make it easier to analyze valuable indexed pricing and penalties. However, capturing this data, converting it into actionable insights, and creating a digital loop with the continuous flow of data and information while ensuring regulatory compliance at times becomes a challenge for travel insurance companies.

DOWNLOAD FREE REPORT SAMPLE

Global Travel Insurance Market – Procurement Market Intelligence Report

Are you planning to invest in the global travel insurance market? Request your free sample to know more about the latest pricing trends, key sourcing opportunities, spend dynamics, and procurement best practices.

Global Travel insurance-170x260

ir8

Insurance Industry Overview and Top Trends

The insurance industry is dynamic in nature and is characterized by rapid technological advancements, increasing customer expectations, and disruptive newcomers redefining the marketplace. All these factors force companies in this industry to focus on addressing challenges, growing top-line sales, bottom-line profitability, and competing in the immensely competitive landscape. Insurance companies have a lot on their plates and the industry is experiencing a rapid evolution. In this article, we have offered insights into insurance industry overview and insurance industry trends that are affecting market growth.

Insurance Industry OverviewContact US

(more…)

IR13

Top 5 Market Leaders in the Claims Processing Industry

Claims processing companies have come a long way. The increasing innovation in operating models and strategies by top companies has spiked up the competition in the claims processing industry. Claims processing is all about an insurer fulfilling their obligation to receive, investigate, and act on a claim which has been filed by an insured. The operations involved in claims processing are heavily scrutinized to avoid fraud and unlawful claims. Recently, there has been a sudden growth in the adoption of automation that provides end-to-end solutions for insurance claims and reduces the occurrence of errors. Moreover, advanced technologies like IoT and wearable technology are finding their way into the claim processing industry. With the help of these technologies, companies can now get real-time insights into the potential risks. It doesn’t stop there, with capabilities such as predictive analytics, rule-based engines, link analysis, and social network behavior analysis, claims processing companies are more empowered now than ever before. (Source: Global Claims Processing Supply Market Intelligence) These advancements are highly sophisticated in terms of fraud detection and improving the efficiency ofGet Free Sample_SE operations. In this blog, we reveal some of the top claims processing companies in the world:

Kohlberg Kravis Roberts

Kohlberg Kravis Roberts is a global investment company that manages multiple alternative asset classes, which includes private equity, energy, infrastructure, real estate, credit, and hedge funds. The company is focused on generating attractive investment returns by employing a high-quality workforce and pursuing the highest standards of excellence. It was founded by Henry Kravis, George R. Roberts, and Jerome Kohlberg Jr. in the year 1976, and is headquartered in New York.

Crawford 

The Crawford System of Claims Solutions offers comprehensive, business process outsourcing, integrated claims services, and consulting services worldwide. The company was founded in the year 1941 and is headquartered in the United States. It employs over 9000 employees and is operational in more than 70 countries worldwide.

York Risk Services 

York Risk Services is a global provider of claims and risk management services. The company offers claims management services for categories such as automobile liability, general liability, property, workers’ compensation, product liability, inland, ocean marine, and professional liability insurance. Their customers include public entity clients, such as states, municipalities and counties, school districts, utilities, parks, risk pools and state colleges and universities. York Risk Services was founded in 1962 and is headquartered in New Jersey with additional offices worldwide. 

Gallagher Bassett Services 

It is one of the premier claims processing providers in the world. The company is dedicated to delivering the products and services that equip people, businesses, and organizations to make the most of their futures. It was founded in the year 1962. They currently have a workforce of approximately 10,000 employees.

Aetna 

Founded in 1853 in Hartford, CT, the company is committed to providing employers, individuals, and others with innovative products and services. Aetna, an American healthcare company primarily deals in consumer-directed and traditional healthcare insurance plans and associated services. These include pharmaceutical, dental, medical, long-term care, behavioral health, and disability plans.


The procurement market intelligence reports from SpendEdge offer a comprehensive cost and supply market analysis. This procurement report also offers insights into the major claims processing providers and sheds light on the major cost and volume drivers and procurement best practices to save costs.

View Full Reports


IR20

SpendEdge’s Spend Analysis Helps a Prominent Client in the Insurance Industry Reduce Maverick Spend and Improve Savings

Overview of the Insurance Industry

The insurance industry plays a pivotal role in the functioning of the economy, owing to the amount of premium it collects, the scale of investments, and the economic role it plays in covering potential risks. Amid tightening regulations and low investment yields, renowned companies in the insurance industry are planning to redefine their business models to achieve sustainable growth and enhance their profit margins. The firms operating in the insurance industry are further planning to tackle the mounting pressures by focusing on developing new products, sales channels, and coverage areas. The growth of the insurance industry can be attributed to factors such as rising standards of living and increasing insurance coverage needs.

Although the insurance industry is witnessing promising growth, several factors may hinder the growth of the industry. They include:

  • Disruptive technology: With the relentless growth in innovations, new technologies are disrupting the traditional broker model. It is estimated that smaller companies are more vulnerable to technology disruption and responding to the emerging changes effectively. Moreover, insurance companies are facing the need to include foundational shifts in their operating models and underlying architecture to ensure flexibility and agility in their process.
  • Aging workforce: The average retirement age of the employees has increased; therefore, it becomes a challenge for the companies a large group of employees retires at once. To keep pace with the growing demand, insurance companies should increase their investment in talent acquisition to ensure stability in leadership, production, and client servicing.
  • Regulations: Prominent companies in the insurance industry are facing the need to operate in the fluctuating regulatory jurisdictions and comply with these changing rules. Consequently, organizations are facing the need to improve their capital requirement and transparency of their existing process while keeping in line with the compliance requirements.

While companies in the insurance industry are working towards the attainment of their goals, it becomes necessary for the insurance companies to keep track of their resources to stay relevant and updated with the technologies. To understand the growth prospects and stay on par with the changing consumer behavior, insurance companies need to keep track of their expenses through a robust spend analysis solution.request free proposal

The Business Challenge and the Journey

A prominent insurance company wanted to counter the challenge of inefficient management and gain better visibility into the business spend. The insurance company also wanted to manage their organizational spend and identify critical saving opportunities. With the help of spend analysis, the insurance firm wanted to gain accurate, consistent, and detailed visibility and identify the savings opportunities to accelerate decision making. The primary concern of the insurance company was to identify the potential bottlenecks in terms of savings leak and purchasing overlaps.

To achieve sustainability in the solution offered, the procurement experts at SpendEdge carried out interviews and discussions with prominent stakeholders in the insurance industry. Furthermore, to identify insightful ways to analyze business behavior for the insurance company, the experts further compiled information from sources such as trade shows, company presentations, and industry forums in the insurance industry.

SpendEdge’s spend analysis solution helped the insurance company understand the current industry trends and find sourcing opportunities in the market. The insurance company was able to understand the current state of spend and devise a short-term and medium-term strategy to improve savings. In addition, the spend analysis solution also helped the insurance company improve the process efficiency and enhance their overall business performance.


Fundamental questions answered in this spend analysis for the insurance company include:

SP01


The Results

The spend analysis solution offered by SpendEdge assisted the insurance company to understand the latest industry trends and offer complete visibility into the spend. The spend analysis solution also offered insightful ways to the insurance company to access, organize, and analyze spend data and ensure that the contract practices are on par with the industry standards.

To know more about our spend analysis solution

request free proposal


Related posts:

IR31

SpendEdge’s Cost Model Analysis Helps a Renowned Insurance Provider Identify the Key Cost Elements

Overview of the Insurance Industry

The insurance industry plays a pivotal role in the sustenance of the global economy by covering personal and business risk. Amid the variations in the growth rate, the insurance industry witnessed a considerable growth in the insurance premiums by an increase of 3.8% in 2015. Markets in Asia, North America, and Western Europe has been some of the major contributors towards this growth. Also, insurers are taking effective measures to re-orientate their offerings to rebalance their product portfolios and enhance their business offerings. Although the insurance industry is witnessing a promising growth owing to the increasing rates and reducing regulatory hurdles, several factors may challenge the growth of this market in the coming years. These include:

Relative advances in technology: New technologies may disrupt the traditional model of insurance. With rapid changes in innovations, insurers are under pressure to revise their internal operations and business strategies to stay relevant inspite  of the competitors.

High penetration of cyber risks: One of the biggest challenges for the insurers is to assess the impact of threats on the company. As cybersecurity breaches can remain undetected for a considerable time frame, it will further affect the customers and other stakeholders. The growing concerns on the concentrations of cyber risk and further, the ability to offer real protection to the clients will affect the growth of the industry over the years.

Aging workforce: The average age of the workforce has increased, and organizations are witnessing a large number of retirees within a stipulated time. To counter this, prominent organizations are facing immense pressure to invest in talent and further manage age concentrations to ensure stability and maintain balanced production.

To address these challenges and optimize their service offerings, leading organizations in the insurance industry are utilizing a cost model analysis engagement.request free proposal

The Business Challenge and Journey

The client, a leading insurance company, wanted to draft a cost-model analysis model to identify the cost elements for the services rendered. The client also wanted to assess the impact of each cost driver on the overall cost of the services. Moreover, with the help of cost model analysis solution, the client wanted to point out the gaps that need to bridged to increase the uptake of costs. The primary concern for the client was to compare the costs of the services and efficiently utilize their resources to meet the needs of the target audiences. The cost model analysis should also focus on the comparison of models to improve the competitive position of businesses.

To help the client evaluate the potential costs and revenues, the cost model analysis experts at SpendEdge carried out an extensive research methodology comprising interviews and discussions with prominent stakeholders in the insurance industry. To gain a comprehensive edge on the costs, SpendEdge’s cost model analysis experts also compiled information across a wide array of secondary information including company presentations and industry forums in the insurance industry.

SpendEdge’s cost model analysis helped the company in the insurance industry effectively assess the impact of each cost driver on the overall cost. The client was able to collect data based on pricing through quantitative cost modeling and scenario-based cost modeling. The client was further able to recommend on the lowest cost mix and reduce insurance operation costs to the minimum.

Key questions answered in this spend analysis engagement include:

Sp-cost model analysis

The Results

The cost model analysis offered by SpendEdge helped the client gain a comprehensive image of the cost developments in the insurance industry. The client was able to consistently reduce costs over time and enhance their operational efficiency. Moreover, the engagement also had a significant impact on the policy issuance, administration, and claims in the insurance industry.

To know more about our cost model analysis

request free proposal


Request free proposal

Get unlimited access to 1000+ procurement reports | Plans starting from 5,000 USD Start FREE trial

Close
SpendEdge Logo

Hello there!

Get in touch with our experts to know more about our subscription and customized research offerings.

We help businesses engage with right suppliers, boost cost savings, develop right benchmarks, and achieve sourcing excellence.

Cookie Policy

The Site uses cookies to record users' preferences in relation to the functionality of accessibility. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice