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Connecting With the Customer.

Insurers must consider strategy, organization and technology in order to create an integrated, holistic system for customer relationship management.

Insurance customers are increasingly interacting through new and multiple channels from which they expect consistent, high-quality service. Insurers need to meet these demands or risk losing business to financial-services providers that are better at meeting customers' growing needs. Insurers' customer-satisfaction ratings generally have been below those of other financial-services businesses. To succeed, insurers must have a holistic, integrated solution to deliver customer relationship management.

The financial-services industry is one of the largest users of customer relationship management, with 1999 spending of $6.5 billion, which is projected to reach $24 billion by 2004. Within this industry, banking and asset-management sectors lead in overall adoption of operational and analytical customer relationship management solutions, while the insurance sector lags.

To successfully implement a customer relationship management system, an insurer needs a well-designed strategy from an organizational perspective as well as an integrated technological approach and aligned business processes.

The core of a successful integrated customer relationship management system begins with the definition of a customer-centric business strategy that is focused on:

* identifying the most valuable existing and future customers as well as distributors;

* understanding customers' and distributors' evolving interaction and service needs;

* developing clear goals and strategies for using customer relationship management that will provide competitive advantages in serving targeted customers and distributors;

* re-engineering business processes and organizational approaches to take advantage of new technologies;

* defining and monitoring specific desired service levels and resultant benefits from customer relationship management implementation; and

* aligning business leaders' performance measurement factors and compensation approaches to achieving customer-service objectives.

From a technology perspective, successful implementation is dependent upon establishing an appropriate technological architecture, a clear integration strategy with existing systems and the adoption of open standards. This is best achieved by:

* identifying the right technology point solutions to construct an open architecture that avoids heavy investments and dependencies;

* mapping key requirements to packaged solutions while realizing that no single package will provide all required functionality;

* developing a logical and realizable integration strategy for master information and key transactional data as a "stand-alone" customer relationship management implementation;

* aligning product-driven mainframe legacy systems with customer- and distributor-driven online systems via enterprise-application integration;

* recognizing that best-in-class applications will change over time; and

* converging multiple customer communication channels into a consistent customer-interaction management system.

It has become a significant challenge to implement a technology architecture for customer relationship management. While numerous existing and emerging applications are well suited to meet specific needs in managing customer relationships, comprehensive approaches are rarely available. A prepackaged solution that integrates and consolidates across the company may be an insurer's best approach on a purchased or hosted basis.

Traditional call centers processed customers' and distributors' telephone calls. Today, a contact center is expected to operate via e-mail, live chat, computer-telephony integration, interactive voice-response systems, broadband and faxes. In the not-so-distant future, leading-edge insurers will use mobile commerce to enhance the customer experience.

The challenge for insurers is to provide a consistent response, regardless of the interaction channel. For example, a customer's query via an online transaction should provide exactly the same result as a telephone call-center agent transaction. Hence, master data and key historical data need to be available to all channels, stressing the need for an integrated platform. A system that combines communication, transactional and analytical capabilities is now a requirement.

Steven Landberg, a Best's Review columnist, heads the insurance business for Nextera Interactive, an e-commerce consulting firm.
COPYRIGHT 2001 A.M. Best Company, Inc.
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Author:Landberg, Steven
Publication:Best's Review
Geographic Code:1USA
Date:Jan 1, 2001
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