Established companies modernize software,
data management to stay relevant as climate change, new competitors
shake up business models, ISG Provider Lens™ report says
Insurance enterprises in North America are integrating new
technologies, including AI, to succeed in an unpredictable, rapidly
changing market, according to a new research report published today
by Information Services Group (ISG) (Nasdaq: III), a leading global
technology research and advisory firm.
The 2024 ISG Provider Lens™ Insurance Services report for North
America finds that the industry is grappling with rising costs,
changing customer expectations and shrinking profit margins.
Property and casualty (P&C) insurers need to cover growing
claims from increasingly severe natural disasters, while life and
retirement (L&R) firms face falling interest rates and economic
uncertainty.
Adaptability is key to survival, ISG says. During the COVID-19
pandemic, insurance companies that had carried out digital
transformations swiftly adopted online platforms and remote work,
gaining advantages over rivals. Forward-thinking insurers today are
using technologies including AI and automation to improve
efficiency, profitability and policyholder experience.
“The leading North American insurance companies are
distinguishing themselves through aggressive automation, AI,
digital and business innovation,” said Dennis Winkler, Americas
leader, Insurance, with ISG. “Those that resist change risk losing
market share and becoming obsolete.”
Most insurers in the region are replacing the systems they use
for core insurance functions, such as underwriting and billing, or
exploring how best to do so, ISG says. Many of these platforms are
decades old, dating from a time when technical requirements and
consumer demands changed more slowly. Providers can help clients
migrate, but the change is a long-term project that requires
extensive preparation.
Along with their core platforms, companies are updating
supporting systems for functions such as accounting and customer
relationship management, ISG says. This can be a complex
undertaking itself, requiring the right ecosystem strategy to
ensure there are no gaps in a company’s capabilities. Insurers are
addressing this need by working with strategic consulting firms,
preferring engagements that place some accountability on the
provider for business outcomes.
Insurance companies are beginning to use AI to derive new
insights and better decision-making from huge volumes of data, ISG
says. This typically requires massive data modernization projects
to identify relevant information and make it usable. Most North
American firms are at the early stages of this process, still
behind newer insurers in other markets, such as Asia.
New technologies are playing a major role in improving customer
experience, the report says. Traditional insurance companies are
building out personalized, omnichannel customer support systems to
meet modern customer expectations and compete with cloud-native
startups. Partnerships with business process outsourcing and
third-party administrator (TPA) providers help insurers efficiently
serve consumers’ needs.
“Investing in advanced technology and services enables insurance
companies to meet and exceed evolving market expectations,” said
Jan Erik Aase, partner and global leader, ISG Provider Lens
Research. “It can set them up to thrive in the near term and grow
and adapt in the long term.”
The report also explores other trends in the North American
insurance industry, including the impact of increasing regulation
and the growing use of straight-through processing to settle claims
faster.
For more insights into the challenges facing insurance companies
in North America, including maintaining profitability and
reinventing business models, see the ISG Provider Lens™ Focal
Points briefing here.
The 2024 ISG Provider Lens™ Insurance Services report for North
America evaluates the capabilities of 67 providers across five
quadrants: Life and Retirement (L&R) Insurance BPO Services,
Property and Casualty (P&C) Insurance BPO Services, Life and
Retirement (L&R) Insurance TPA Services, Insurance ITO
Services, Insurance ITO Services — Midmarket and Insurance ITO
Services — Midmarket Next-gen.
The report names Accenture, Cognizant and EXL as Leaders in four
quadrants each. It names Genpact, Infosys, TCS and WNS as Leaders
in three quadrants each and DXC Technology, NTT DATA, Tech Mahindra
and Wipro as Leaders in two quadrants each. Capgemini, Coforge,
Davies Group, Ensono, EPAM, Fujitsu, GFT, HCLTech, Hexaware, HTC
Global Services, Illumifin, Iron Mountain, Kyndryl, LTIMindtree,
Mphasis, Persistent Systems, Publicis Sapient, Randstad Digital,
ReSource Pro, Sutherland, Unisys, Xceedance, Zensar Technologies
and Zinnia are named as Leaders in one quadrant each.
In addition, Sutherland is named as a Rising Star — a company
with a “promising portfolio” and “high future potential” by ISG’s
definition — in two quadrants. EPAM, Patra Corporation,
Teleperformance and Virtusa are named as Rising Stars in one
quadrant each.
In the area of customer experience, Persistent system is named
the global ISG CX Star Performer for 2024 among Insurance Services
providers. Persistent system earned the highest customer
satisfaction scores in ISG's Voice of the Customer survey, part of
the ISG Star of Excellence™ program, the premier quality
recognition for the technology and business services industry.
Customized versions of the report are available from Sutherland
and WNS.
The 2024 ISG Provider Lens™ Insurance Services report for North
America is available to subscribers or for one-time purchase on
this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only
service provider evaluation of its kind to combine empirical,
data-driven research and market analysis with the real-world
experience and observations of ISG's global advisory team.
Enterprises will find a wealth of detailed data and market analysis
to help guide their selection of appropriate sourcing partners,
while ISG advisors use the reports to validate their own market
knowledge and make recommendations to ISG's enterprise clients. The
research currently covers providers offering their services
globally, across Europe, as well as in the U.S., Canada, Mexico,
Brazil, the U.K., France, Benelux, Germany, Switzerland, the
Nordics, Australia and Singapore/Malaysia, with additional markets
to be added in the future. For more information about ISG Provider
Lens research, please visit this webpage.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading
global technology research and advisory firm. A trusted business
partner to more than 900 clients, including more than 75 of the
world’s top 100 enterprises, ISG is committed to helping
corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster
growth. The firm specializes in digital transformation services,
including AI, cloud and data analytics; sourcing advisory; managed
governance and risk services; network carrier services; strategy
and operations design; change management; market intelligence and
technology research and analysis. Founded in 2006, and based in
Stamford, Conn., ISG employs more than 1,600 digital-ready
professionals operating in more than 20 countries—a global team
known for its innovative thinking, market influence, deep industry
and technology expertise, and world-class research and analytical
capabilities based on the industry’s most comprehensive marketplace
data. For more information, visit www.isg-one.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20250120449671/en/
Press:
Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG +1 978-518-4520
isg@matternow.com
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