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Changes Expand Providers’ Role in U.S. Insurance Industry
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
U.S. insurance companies are increasingly outsourcing services to improve efficiency and customer satisfaction, driven by challenges from the COVID-19 pandemic, inflation, and evolving customer needs, according to the ISG Provider Lens™ report. Insurers are leveraging digital technologies and collaborating with service providers to create personalized products and adapt to new market dynamics. The 2022 report evaluates 50 providers and identifies leaders like Accenture and Cognizant across various service categories. These partnerships are crucial for enhancing operational capabilities and responding to rising consumer expectations.
Positive
Insurance companies are partnering with service providers to use advanced technologies, enhancing customer satisfaction.
Outsourcing services is becoming essential for insurers to cope with rising claims and inflation.
Use of AI and machine learning is on the rise to develop personalized insurance products targeted at specific customers.
The report identifies several leaders in the insurance services industry, indicating strong competition and innovation.
Negative
Insurers are struggling to hire and retain enough IT experts, which may hinder their digital transformation efforts.
U.S. insurance companies expand outsourcing after pandemic, war and other factors create ongoing series of crises, ISG Provider Lens™ report says
STAMFORD, Conn.--(BUSINESS WIRE)--
Insurance companies in the U.S. are strengthening their partnerships with service providers to efficiently use new digital technologies to increase customer satisfaction, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2022 ISG Provider Lens™ Insurance Services report for the U.S. finds the country’s insurance industry has responded to rapid changes in business conditions since the beginning of the COVID-19 pandemic by acquiring more advanced services from third-party providers. Faced with growing claims, rising inflation and changing customer expectations, U.S. insurers have taken advantage of a head start in outsourcing to build essential new capabilities in collaboration with providers.
“Insurance companies are dealing with major changes that have emerged over the last three years,” said Paul Schreiner, ISG partner, insurance. “They have started to reimagine, reinvent and reposition themselves for long-term success, with service providers playing key roles in helping them adapt.”
In 2022, higher risk profiles and other disruptions caused by the pandemic collided with new events, including the war in Ukraine, to create an ongoing series of crises for the insurance industry, the report says. Insurance companies see new technologies as essential to respond to these crises, but most have struggled to hire and retain enough IT experts to transform their systems, so outsourcing is becoming a more critical resource.
U.S. firms, which have embraced outsourcing for decades, are now turning to partners for more than just cost savings, ISG says. Insurance service providers of all types have developed a deep understanding of the insurance industry, organizations and customers and are even helping clients develop new products.
To serve the new generation of digital-native customers, insurance carriers are creating more personalized solutions that require considerable experimentation and the freedom to move beyond legacy processes and corporate culture, the report says. Companies are using AI and machine learning to collect and analyze data from internal and external sources that can be used to quickly craft offerings targeted at specific customers.
“The next generation of insurance products will not be ‘one size fits all,’” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Service providers are helping clients gain a competitive edge in attracting new, digital-savvy customers.”
The report also examines other trends in the U.S. insurance services industry, including how companies are responding to rising consumer interest in life and retirement insurance, how property and casualty insurers are emerging from archaic legacy systems and how new rules and products are changing the roles of life and retirement third-party administrators (TPAs).
For more insights into the challenges faced by insurance companies in the U.S., along with advice on addressing those challenges, see the ISG Provider Lens™ Focal Points briefing here.
The 2022 ISG Provider Lens™ Insurance Services report for the U.S. evaluates the capabilities of 50 providers across four quadrants: Life and Retirement Insurance BPO Services, Property and Casualty Insurance BPO Services, Insurance ITO Services, and Life and Retirement Insurance TPA Services.
The report names Accenture, Cognizant and Infosys as Leaders in all four quadrants. It names DXC Technology, EXL, Genpact, TCS and WNS as Leaders in three quadrants each and illumifin as a Leader in two quadrants. Atos, Capgemini, CGI, NTT DATA, Sutherland and Wipro are named as Leaders in one quadrant each.
In addition, IBM, LTIMindtree, Sutherland and Xceedance are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.
A customized version of the report is available from WNS.
The 2022 ISG Provider Lens™ Insurance Services report for the U.S. 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, 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.
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 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 automation, 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 1,300 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.
Julianna Sheridan, Matter Communications for ISG +1 978-518-4520
isg@matternow.com
Source: Information Services Group, Inc.
FAQ
What are the key findings of the ISG Provider Lens report on U.S. insurance companies?
The report highlights that U.S. insurance companies are increasingly outsourcing to improve efficiency and customer satisfaction in response to challenges like the COVID-19 pandemic and rising inflation.
Who are the leading providers in the ISG Provider Lens Insurance Services report?
The report names Accenture, Cognizant, and Infosys as Leaders across all four quadrants evaluated.
How are U.S. insurers adapting to changing customer expectations according to the report?
Insurers are leveraging digital technologies and forming partnerships with service providers to create personalized solutions for a new generation of digital-native customers.
What challenges do U.S. insurance companies face in transforming their services?
Insurers are facing difficulties in hiring and retaining IT experts, which is critical for their digital transformation efforts.
How is AI being used by insurance companies as mentioned in the report?
Insurance companies are using AI and machine learning to analyze data and develop personalized insurance products tailored to specific customer needs.
