In a recent article in Claims Magazine, a report of a study done by Celent indicated that only 13% of U.S. insurers had plans on investing in new claims systems this year. Much of this may be due to the economic downturn globally and the fact that claims departments are usually the last to receive any upgrades in technology. It appears a majority of insurance carriers will work with their current legacy claims systems for the time being. The study also touched on the topic of outsourcing claims adjusting operations. 91% of of the carriers in the United States indicated they would not outsource their claims procedures but in Europe 12% of the carriers are open to outsourcing at least some portion of the operations.

Additionally the study indicated that U.S. insurers largest pressures were focused on growing business in a soft market while also keeping an eye on expenses. European insurance carriers are much more willing to utilize outsourced contractors compared to their U.S. counterparts in order to reduce expenses.

The question remains for U.S. insurance carriers. Will they move to more claims outsourcing for specific portions of the process,( ie. auto damage appraising, adjusting.) or maintain a higher LAE with full time staff to handle all adjusting procedures? Much may be determined by the length of the economic downturn and financial position of each specific carrier.

Source: Claims Magazine and Celent.com