The report, "Insurance industry e-business: better service at lower cost," shows that insurance companies remain committed to e-business despite the downturn. Nine in 10 respondents to the survey say the need to improve customer service and cost saving are top of the list of organisational priorities.

The findings come from a survey of 30 leading domestic and international insurance firms commissioned by information management company ActionPoint and conducted by Byline Research.

E-business continues to depend of the ability of the organisation to transform paper into electronic content, says the report. Three-quarters of respondents (74%) agree that despite technological advances, the ability to deal with paper is as important to their business now as it was 10 years ago.

Forty-seven per cent of companies surveyed say the biggest barrier to removing paper is customer resistance. Although 36% of the UK population has Internet access, many insurers believe their customers are not yet ready to do business online, says the report.

John Stetak, vice president of marketing for ActionPoint, says: “Insurance firms are taking the pragmatic view that if they can’t eliminate paper then they need to be able to deal with it as effectively as possible.”

'Usability' of information in paper documents and the ability to integrate document capture with back-office systems are the two biggest technical challenges facing insurance companies, according to the research. The speed and accuracy of transforming paper into e-business content are identified as problem areas by 33% and 27% of respondents, respectively.

Stetak comments: “Paper remains the raw material of e-business for many customer-facing applications, such as claims processing. Extracting information rapidly and accurately from incoming documents not only allows insurance companies to reduce the process costs associated with paper handling, it allows them to be more responsive to customers."

Although it is no longer a legal requirement to obtain a hand-written signature, only one in five insurers expects to start using digital signatures routinely within two years. One third believe it could take three years or more and 27% argue that they will never use them.