Demand Supply Analysis: Category Managers’ Guide To Procuring Effective Insurance Services

Major category requirements for the insurance market

When it comes to category requirements, almost all buyers aim towards gaining:

• Better guidance from trusted advisors
• Control over risk exposure
• Periodic review of policy benefits

Procurement managers prefer suppliers who provide diverse cost optimization levels, in the form of better contract and pricing models. For instance, by including risk control measures in the policy agreement, suppliers can easily provide protection against risk exposures. This way the buyers just have to follow the risk mitigation measures. Similarly, category managers prefer suppliers who adopt the consultative approach and help in proactively addressing all needs including finding suitable policy coverage, renewal, and filing of claims.

An analysis of the demand-supply shifts in the insurance market

As per our procurement market intelligence report, increased awareness about the risk sharing methods is perhaps one of the strongest reason behind the growing demand for insurance services. The global insurance market, being a highly competitive sphere, is prone to several demand-supply shifts.

Even in cases where the demand has been constant since the past few years, suppliers are trying to differentiate themselves by adopting advanced technologies and enhancing their services. Buyers, on their part, especially from the emerging economies are looking for insurance services suppliers that have a wide portfolio, particularly in the case of medical insurance products.

Until now, claim denial has been a major game-changer in the global insurance market. Often it has been witnessed that nitty-gritty like unmet deductibles, lack of proper pre-authorization/authorization, and filing of claims after the service dates have resulted in a huge loss for the buyers. Suppliers, on their part, lose both the customer as well as the brand image whenever there is a failure in providing claims. For an industry, which is already quite fast-paced, such errors can have a negative influence on both the procurement managers as well as the suppliers.

At present, procurement and supplier management teams are working towards building an equation; wherein, there is a solution where everyone benefits. At the global level, dynamic changes like the adoption of IoT for risk analysis, demand for cyber security insurance, and entry of non-insurance entities into the supply market are taking place. Usage-based insurance (UBI) is yet another innovation that has had a drastic influence on the demand-supply chain of the insurance market. As UBI allows suppliers to track buyers’ driving behavior and charges premiums accordingly, procurement managers see it as a key influencer in the supply of insurance services.

Overall the demand-supply paradigm of the insurance market is building around the growing need for risk coverage from the demand market and improved product profile backed with extended coverage from the supplier’s end.

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