As discussed in a recent article in Carrier Management, the USI’s recent report is valuable in affirming the unsettled and competitive landscape of the workers’ compensation industry continuing into a new year. This isn’t a year over year trend; it is a reality of the industry, and there is no indication it is going to change. The reaction to these market conditions is evolving.
Carriers are well advised to increase or begin investments in analytics to understand their results at the most granular level. Finding the sweet spots of opportunity are being defined in very targeted ways. Big Data, predictive analytics, and understanding the impact of MedTech provide carriers with better insights.
This leads to micro market segmentation and the need for variable sourcing. Getting into this profile of business strategy requires agility that isn’t always well supported by carrier’s core technologies. Beyond the nimbleness of product offering there will be a need to quickly expand and contract into markets. Carrier IT departments should be moving to variable costs capabilities, including staffing and infrastructure. IT departments planning to directly retain fixed assets and have no variable staffing model will create an expense posture that will foster unacceptable business constraints which will be unacceptable.
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