London, UK (Feb. 6, 2017) – According to the latest procurement intelligence report from Technavio, the global insurance services market is expected to grow at a CAGR of 4.9% over the next five years due to the increase in the use of IoT and changes in the operating models adopted such as the emergence of P2P and on-demand insurance models.
The research report titled ‘Global Insurance Services: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“Many governments across the world have implemented insurance-enabling regulatory measures that mandate the use of insurance products and decrease the usage complexities such as changes in tariff rates,” said lead Technavio procurement expert Angad Singh for category spend intelligence research. “For instance, acts such as ORSA promote ERM that helps organizations identify and profile their own risks,” added Angad.
Cost saving opportunities in the insurance services market
The adoption of various cost optimization levers helps buyers of insurance services realize cost savings and achieve category management and value benefits (including a reduction in procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the insurance services market into the following value-enhancement opportunities:
- Adoption of technology;
- Supplier Competition;
- Adoption of negotiation strategies;
- Optimization of procurement practices;
- Unbundling of services.
Adoption of technology saving aspects
Insurers utilize IoT in the form of vehicle telematics, connected home technologies (such as smart security systems, switches, and other devices) and wearables (they collect information about physical activities of wearers).
Insurers automate various office functions using AI. Recent developments in the industry involve the use of robo-advisors or chatbots to resolve customer queries.
Optimization of procurement practices saving aspects
Buyers are adopting reverse auctions to evaluate and select service providers and to reduce the prices of service offerings. Buyers are also comparing insurance offerings with industry peer groups to make informed decisions. They can compare various options covered by insurance companies to choose the best options for employees (in the case of business insurance).
Unbundling of services saving aspects
Unbundling of insurance services can help identify the best match for the insured and help procure the right level of benefits at the right prices. This practice has gained momentum in recent years due to the increased adoption of digitization in the insurance sector.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.