Discussion

1. In a new report, Celent Model Insurer 2013: Case Studies of Effective Technology Use in Insurance, Celent recognizes 17 insurance technology initiatives as Model Insurer Components. These best practices in the use of technology span key areas of the product and policyholder lifecycle, including product development, distribution, underwriting, policy administration, IT management, claims, and infrastructure. The report also reviews IT best practices and measurable business results used in evaluating the Model Insurer Components.

Insurers continue to stress innovation in their initiatives. However, IT projects that reduce long-term costs, improve back office operations, and provide better customer service are also prevalent in this years award winning projects, Insurers continue to concentrate on improving operations but are also stepping up their use of emerging technologies.

Discuss the importance of information technology to an insurer and evaluate the IT trends for insurers based on the materials given.

2. Trov, the provider of on-demand insurance for individual items, has raised $45 million for its global expansion efforts. The company is one of a growing number of tech-enabled startups that are looking to change the insurance business and carve out a piece of that multi-trillion-dollar industry. At Danville, Calif.-based Trov, that means providing insurance policies for individual items on mobile phones.

Insurers have found themselves in a bind in recent years, with home ownership declining and the number of households that dont own cars rising (albeit slightly). Those two trends could accelerate as younger consumers look to rent more and own less. Trov plays into these trends by offering insurance policies on things that millennials do own namely electronics. Typically a Trov policy covers items of around $1,000, which makes the companys policies a numbers game rather than a play for big ticket policies. Digging into the policies a little deeper, about 35% of the policy holders who take out a Trov policy do turn off their coverage after a time. Most leave them on again, the period the company is tracking isnt all that long so these numbers could change significantly.

Use the five forces model to evaluate Trovs growth strategy.