Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
ThinkAdvisor

Life Health > Life Insurance

Midsize Insurers Spend 59% More On Policy Processing

X
Your article was successfully shared with the contacts you provided.

NU Online News Service, Nov. 14, 2003, 12:47 p.m. EST – Midsize insurers are cutting life insurance information technology budgets faster than bigger life insurers, but life processing costs are growing faster at the midsize insurers than at the bigger insurers, according to results of an informal, voluntary survey conducted by TCi Consulting & Research, Cresskill, N.J.

TCi found that total life insurance IT expenses are down 3.5% at the bigger companies this year but down 11% at the midsize companies.

Even though the midsize life insurers that participated in the TCi survey have pruned life IT budgets, they are spending 59% more on total processing expense per in-force policy, mainly because the operations cost is $43.59 per policy at the midsize companies and only $19.39 at the big companies, TCi says.

The midsize survey participants are devoting 78% of their processing expenditures to operations, while the big companies are devoting only 55% of processing expenditures to operations.

The cost of processing new life business is $448.14 per application for the midsize companies that participated in the TCi survey and $449.25 at the big companies.

At annuity operations, total IT expenses are up 11% at the midsize companies and up 1.4% at the big companies.

The midsize companies are spending 20% more than the big companies are spending on total processing expenses per in-force annuity contract, and the midsize companies are spending 36% more on processing each new contract, TCi says.


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.