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Abstract
For long enough insurance companies could sustain and
prosper with a combined ratio of more than 100. This
was possible because good returns on investment portfolios
contributed generously towards a healthy bottom line.
However today, with investment incomes dwindling, insurance
companies are forced to revisit the way they conduct
their operations. Adding to their woes is the changing
economic environment with characteristics such as globalization,
deregulation, demutualization, and consolidation. These
and their ripple effects are having significant influence
on how and what insurers should to do to ensure a profitable
survival in the coming years. Insurance companies have
to be profitable in their core activity of underwriting
without an undue dependence on other sources of income
like investments. Essentially the combined ratio, which
comprises the loss ratio and the loss expenses adjustment
ratio, needs to breach the 100 mark. Wipro has developed
solution frameworks that would help insurers bring down
the combined ratio by addressing its two components.
These solutions are delivered leveraging the existing
IT infrastructure, without demanding aggressive IT investments.
Underwriting transformation is the analytical solution
for underwriting process improvement and is geared to
help bring down the loss ratio. The other solution uses
the activity based costing analysis to help bring down
the loss expenses adjustment ratio. This white paper
focuses on a comprehensive underwriting transformation
solution framework which insurance companies can adopt.
Authors
Subhobroto Ghosh
Arup Ghosh
To know more about Wipro in insurance, go to www.wipro.com/insurance
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