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Technology's Effect on Property–Casualty Insurance Operations

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  • Robert Puelz

Abstract

The post‐Glass–Steagall era has presented insurers with new opportunities and risks during a time when information flows and business processes are being impacted by changing technology. In this article, we explore how insurers use and perceive current technology to carry out their operations by reporting results from a sample of insurers that includes some of the nation's largest property and casualty insurers. We find among insurers in our sample that an online channel is having a significant impact on customer retention and revenue enhancement, but a lesser impact on cost reduction. Interestingly, about two‐thirds of our sample has experienced an increase in their overall number of transactions following the adoption on an online channel. Moreover, while the Internet is perceived as giving marketing benefits it is not being used as a substitute for agents. We find that 65 percent of respondents have used technology to integrate customer data across functional areas and another 23 percent plan to do so in the next 3 years. Nearly 71 percent of respondents have or plan to adopt service‐oriented architecture in their technology infrastructure.

Suggested Citation

  • Robert Puelz, 2010. "Technology's Effect on Property–Casualty Insurance Operations," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 13(1), pages 85-109, March.
    • Handle: RePEc:bla:rmgtin:v:13:y:2010:i:1:p:85-109
    DOI: j.1540-6296.2009.01175.x
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    File URL: https://doi.org/10.1111/j.1540-6296.2009.01175.x
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    References listed on IDEAS

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    1. Berger, Allen N & Cummins, J David & Weiss, Mary A, 1997. "The Coexistence of Multiple Distribution Systems for Financial Services: The Case of Property-Liability Insurance," The Journal of Business, University of Chicago Press, vol. 70(4), pages 515-546, October.
    2. J. David Cummins & Jack VanDerhei, 1979. "A Note on the Relative Efficiency of Property-Liability Insurance Distribution Systems," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 709-719, Autumn.
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    Cited by:

    1. Ashu Tiwari & Archana Patro & Imlak Shaikh, 2019. "Information Communication Technology-Enabled Platforms and P&C Insurance Consumption: Evidence from Emerging & Developing Economies," Review of Economics & Finance, Better Advances Press, Canada, vol. 15, pages 81-95, February.

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