Thursday, 25 December 2014

Customer Relationship Management (CRM) in Insurance

Today, the insurance service industry is undergoing changes where the insurance field is becoming extremely complicated as well as more competitive. Money matters require trust and thus, insurance companies are resulting to the establishment of trusting and long-term relations with customers. Towards this end, insurance companies have resulted to the use of Customer Relationship Management (CRM) software. CRM requires the establishment of long-term and trusting customer relationships. It also calls for linking of all departments and subsidiaries with a single knowledge database. CRM software will manage all documents like meetings’ minutes and contracts.

Insurers in modern day’s environment are preventing from delivering flexible and innovative solutions due to expensive maintenance, expensive resources, complex legacy Information Technology (IT) environments, and disparate systems resulting from organic growth. Additionally, reporting and regulatory compliance make service delivery more complex. Insurers, especially those who deal with multiple line-of-businesses are encumbered with information asymmetry when examining divergence or convergence thus making information sharing a nightmare within the business enterprise. Chief among these challenges is the duplicate entries and dissimilar data spread across an assortment of systems across and within the enterprise in the hands of the customer, agents, representatives, and agents culminating to a bizarre opportunity-loss scenario.

To ensure quality and consistent customer interaction as well as empowering agencies and representatives to anticipate customers’ subsequent insurance needs, a Customer Interaction Management (CIM) solution should provide accessibility to relevant, updated, and unique customer data distributed across multiple line-of-businesses and business systems. It should also expose any product division to data mining and customer knowledge to publish products propensities. Leveraging existing investments through specified record and insurance systems through combination policies, rules, analytics, and inference is important. This to provide complex reasoning models through analytics, data, time, customer, and events.  The CIM should empower independent and representatives agencies. Moreover, the CIM solution should provide real-time interactions with customer through chic caching techniques.

CIM solution provides customers with professional services since the insurance company can access relevant information instantly. Employees are able to provide customers with the right information for delivery reliable and excellent services. Again, it provides independent supervisors, field staff, and the branches of the insurance company with a central pool with updated information. Storing data in a central CIM system, every subsidiaries and departments are able to access similar information. Lastly, insurance companies are able to manage an assortment of reports, contracts, forms, as well as other documents. The central database provided is accessible to both external and internal staff. Employees can work efficiently since finding information is a little easier. The CIM solution should address the complexities and uniqueness of various outbound and inbound channels. It should permit customer billing, policy, claims, as well as provide history that should be distributed athwart multiple systems.

The CRM software should provide scalability, high availability, and flexibility.  A CIM solution should provide an incorporated customer experience. Insurers should ensure that they leverage their customers effectively to ease doing business in an integrated manner. To succeed in a highly dynamic and competitive environment, it is proper to treat the customers well and bolster customer relationships. An effective CIM requires a database and application agnostic event-driven architecture. Driving cross-sell and up-sell opportunities using outbound and inbound events is an important CIM aspect. It should also incorporate feedback models to evaluate the micro- and macro dimensions of models’ effectiveness.

Today, either most insurers are automated or they are becoming automated. CRM software aims at making automated systems product-centric. This way, they are able to address claims management, actuary systems, policy administration, and billing. However, the CRM solution must be integrated in all business processes to achieve response accuracies, improve efficiencies. Insurance companies are utilizing CRM ventures to improve service quality for clients. This in turn reduces operation costs at once. CRM applications assist insurers to distinguish opportunities arising from up-sell and cross-sell additional services and products. CRM tools alert the service staff who may move to a different financial institution or insurance carrier. A CRM can bolster marketing transmissions through ensuring messages are conveyed to the targeted customers. This may improve life-event marketing.

CRM solutions provide products quick reference, and catalogues. This enables the insurer to determine whether the selling time is beneficial and consequently reduces time taken to undertake product changes. It equally provides quick communication and reduces distribution costs through creation of feedback forums, web capture accounts and cases, and emailing capabilities. This enhances customer satisfaction and response times. Underwriters are able to stay focused as well as update their cases and this enables customers get faster as pertaining insurance applications. Policyholders are also able to have control over insurance processes through event and task management, and web-based forms to help them file losses and claims. Moreover, a CRM solution increases marketing automation and this bolsters qualified leads, response tracking, list management, and market segmentation.

Channel adapters are important for the transformation and access of system data. Moreover, customer interaction (recommendation) engines to be used by business users are important. Virtual data sources help in the integration of customer as well as other information resulting from varied data sources. Within the CIM architecture are channel adapters that help in non-intrusively and intrusively publish the relevant events to recommendation engines and initiate dialogues with customers. In addition, the recommendation engine integrates channels with events. It also provides generic offers as well as customer responses. Leading insurers know that their customers with the most important strategic asset by adopting customer-centric Information Technology (IT) strategies in achieving a competitive advantage.

Virtual data sources integrate all relevant product and customer-related data. Competitive advantage is ‘insured’ when customer satisfaction is achieved. A permutation of CRM and policy administration systems helps in capturing inbound data stream for customers and store information in central repositories. However, this would require an insurance company to develop market campaigns after identifying catchment groups. Additionally, when systems are not coordinated, multiple mailers or callers may be received for similar services leading to wastage of money and marketing resources.

In order to realize business objectives like acquiring as well as retaining customers, providing efficient customer service, and cross-selling products, the insurance carriers must be more customer-centric and less product-centric. To do this, they encounter operational challenges that stem from growth and development of channels and products. It is important that they comprehend and know their customers as well as provide effective and efficient customer service. Most importantly, leveraging cross opportunities at a given time is important. To carry out real-time and intelligent cross selling, they must bolster CIM, customer service, and multi-channel integration. This happens when marketing and operational customization has occurred.

Modern-day insurance organizations have to address sluggish economies, and unprecedented competition. This has made building customer-centric customers are necessity to create and sustain long-term success. This essay has demonstrated that a CRM solution ensures that insurance business obtain improved operations, get better records, retain customers, reduce costs, and turn customer relationships into earnings. However, CRM implementations require proper leadership and true commitment to realize the rewards it brings along with it. To have improvements in the various business processes as well as customer-focused activities, insurance providers must develop detailed budgets and action plans that are task-based.

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