Best’s Special Report: Spanish Insurers Utilise New Technology, but Traditional Distribution Methods Dominate

Business Wire

LONDON--(BUSINESS WIRE)-- Spanish insurers are increasingly using technology to cross-sell products and target niche markets as growth opportunities domestically and abroad become increasingly limited, according to a new special report by AM Best.

AM Best’s analysis of the Spanish insurance market shows the sector remains profitable, but margins are under pressure, and the low interest rate environment places strain on investment returns. Companies have previously attempted to grow outside their domestic territories into Latin America, where they have a natural affinity with shared language and cultures. However, in recent years, targeted countries have faced more testing political and economic conditions.

The Best’s Special Report, titled “Spanish Insurers Utilise New Technology, but Traditional Distribution Methods Dominate”, notes Spanish insurers seeking to grow their top line are increasingly focusing on the utilisation of technology to extract data from existing customers. Buzzwords surrounding the sector include agility, disruption, and transformation. Spanish insurers are exploring how big data, blockchain, and artificial intelligence could increase efficiencies at a time of growing mobile technology penetration. This would enable better understanding of customer needs, and help improve customer experience.

Yvette Essen, director of research and report author, said: “In AM Best’s view, effective use of technology can enable the Spanish primary sector to improve engagement with customers and focus on product development. An increase in resources dedicated to innovation and disruptive technologies should be focused on enabling greater attention to content, rather than solely providing alternative distribution channels.”

In AM Best’s opinion, Spanish primary insurers’ main objectives should be increasing agility and efficiency, encouraging cross-selling, and improving transparency. Effective use of technology may help reduce transaction costs and enable access to clients in more remote locations. The use of artificial intelligence to analyse historic information and construct models may not only assist with pricing, but also client retention, increasing conversion rates, and up-selling.

Jessica Botelho, senior financial analyst, said: “Investments in technologies may contribute to streamlining processes, and increasing efficiencies in a number of functions, including finance, underwriting or claims management. AM Best would expect this to result in better expense control, which, in the longer run, should translate into stronger performance.”

To access a complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=282925.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.