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The easiest way to grow your book of business is to keep your customers happy. Retention goes up, cross sell goes up, and you will get referrals. This isn’t a big revelation. Carriers know this. The key to keeping customers happy is to create a top-notch customer experience. But insurance is complex. Consumers have a greater number of choices today than ever before and consumers are accessing carriers through more channels than were ever available in the past. This complicates the picture at the same time that expectations are increasing. Customers expect that the carrier knows the details of every prior interaction they have had. That is hard to do when customer data is fragmented across multiple systems. Customer experience includes many facets – advertising, the acquisition process, claims and of course, the quality of customer care. Carriers are looking for tools to help them provide a superior customer experience regardless of the channel the customer chooses to use at the time. That is probably why we are seeing a huge increase in the interest in Customer Relationship Management tools especially by small and midsize carriers who haven’t invested in this type of software before. Customer relationship management systems are one of the components in many insurers’ application maps. Although CRM solutions are not unique to the insurance industry like policy administration or claims systems, they are still key technologies used to manage relationships with customers, whether customers are defined as agents/distributors, claimants, end policyholders, or prospects. There are literally hundreds of CRM solutions available today from firms large and small, well-known and obscure. I’ve just published a report focused on enterprise solutions for larger-scale organizations similar to most US insurance firms. The report does not include CRM solutions that are appropriate for small organizations such as independent agencies or advisors. It also does not address horizontal solutions that are not specifically targeting the insurance industry with tailored capabilities. There are a wide range of CRM solutions on the market for insurers to choose from. A wide range of features and functionality are available. These systems are used in various capabilities within insurance carriers — from producer management, to call center support, to managing leads and campaigns. Integration with other systems will be needed to provide the most value to a carrier. There is no single best CRM solution for all insurers. There are a number of good choices for an insurer with almost any set of requirements. The right solution for a carrier depends on how the carrier plans to use the solution. Some carriers use CRM solutions as a front end to all the core applications. It is the entry point for a call center representative to access all data for those who are calling. Other carriers use CRM solutions to manage interactions with the distribution channel. Still others use it primarily to manage outbound marketing campaigns and may extend this capability to the external distributors. System selection also may be driven by how the carrier defines “customer.” Some carriers define the customer as their agency or broker-dealer firms. Others define the customer as the final purchasers of the insurance policies and annuities. Some solutions may be better at handling some business models than others (e.g., 20 million end user clients vs. 200 agencies), though most would claim to be able to handle all levels of “customers.” Therefore, the ability to build and maintain appropriate hierarchies (agency or broker-dealer, agent or advisor, household or individual) within CRM solutions is an important aspect to examine. An insurer seeking a new CRM solution should begin the process by looking inward. Every insurer has its own unique mix of distribution channels, geography, staff capabilities, business objectives, and financial resources. This unique combination, along with the organization’s risk appetite, will influence the list of vendors for consideration. Some vendors are a better fit for an insurance company with a large IT group that is deeply proficient with the most modern platforms and tools. Other vendors are a better fit for an insurance company that has a small IT group and wants a vendor to take a leading role in maintaining and supporting its applications. We recommend that insurers that are looking for a CRM system create narrow their choices by focusing on four areas:
- The functionality needed and available out of the box for the way the carrier plans to use the system and the customer types desired. Check to see what is actually in production.
- The technology — both the overall architecture and the configuration tools and environment.
- The vendor stability, knowledge, and investment in the solution.
- Implementation and support capabilities and experience.