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Frugal IT budgets don't skimp on customer service upgrades. (Technology).

Although strategic information-technology spending has slowed across all financial-services sectors due to the slumping economy, many insurers are cautiously investing in strategies to improve customer service, retention and potential lifetime value of policyholders, according to a recent study.

"Insurers are recognizing the fact that they can no longer operate under a product-centric strategy and need to alter that strategy enterprisewide so that it can be focused instead around customers," said Stephen Ross, an analyst with Meridien Research and study author.

The report, "Insurance Client-Centric Strategies: Reach for the Stars with Service," introduces three key customer relationship management strategies: an operational customer information system, frontoffice CRM/channel support with Web-based self-service capabilities and rule-based business-process automation. According to the report, these strategies can give insurance providers a competitive advantage.

Meridien estimates that global spending on insurance-related CRM project initiatives will reach $1.6 billion by the end of the year, a modest increase from 2001. The study projects spending will increase 8%, compounded annually, reaching $2.5 billion in 2006.

"Insurance providers that 'get CRM' are continuing to invest in initiatives that streamline operations and improve customer service to policyholders," Ross said. "Insurers that differentiate the customer's total experience throughout the entire life cycle will win."

Newton, Mass.-based Meridien Research provides analytical research services to users and providers of financial industry technology.
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Title Annotation:information technology, insurance industry
Comment:Frugal IT budgets don't skimp on customer service upgrades. (Technology).(information technology, insurance industry)(Brief Article)
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Jun 1, 2002
Words:222
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