How smart do insurers have to be to engage customers? Just how much customer data from sources near and far and how much analysis of customer behavior is necessary to create an effective engagement model? The answer may as well be, “How much money are you willing to spend?” Overlooked, however, is the fact that core systems data is actually customer insight lying in plain sight. How can insurers get at it and use it for intelligent engagement? Why must they?
It’s All about Retention, Retention, Retention
During a session at IASA 2016 entitled, “Core Customer Intelligence at Work = True Customer-Centricity for Insurers,” IBM’s Institute for Business Value insurance leader Christian Bieck cited retention as one of the biggest, if not the biggest, challenge for insurers. Low trust and low insurer flexibility to meet customer needs leads to unsustainable customer churn. It is a bottom line issue: insurers spend up to seven times more to attract a new customer than to retain an existing one.
There are three things insurers need to do, says Bieck.
Firstly, understand customer values and behaviors. Creating customer profiles allows insurers to treat customers in a way that increases emotional involvement. Is the customer a demanding support-seeker, a price-oriented minimalist, an informed optimizer or another “type”? Insurers can scour available data to deduce meaningful patterns and engage in a personalized manner. Transparency is key. Creating and publicizing a “customer data policy” specifying how you will use data and how customers will benefit paves the way.
"Core systems data is customer insight lying in plain sight"
Secondly, offer customer value. Value has many components, and it is cardinal that customers understand the product and perceive the price is fair. Surprisingly, Bieck’s research shows the price has to be “right”, not necessarily low. The next step is supporting customers in areas they value: offer information related to their coverage and add risk mitigation or prevention services.
Thirdly, fully engage. Customer journey maps for each profile generate a fuller picture of all touchpoints and a unified front end ensures customer data and product information is equally available at all touchpoints.
Tap the Information Vein for a Customer View
Customer engagement is not rocket science, but it is not easy either. If it was, everybody could do it and that is clearly not the case. Research from co-panelist Mark Breading, a partner at SMA, shows that insurers are very interested and active in customer engagement and experience: it is the top strategic investment in both 2015 and 2016. However, only 8% are successful at a single view of customers in real-time across all channels. The single view is a vital first building block. The goal is a complete 360° insurance experience for customers and insurers, says Breading.
Insurers have a long way to go but Breading is optimistic for those insurers who can take a comprehensive look at what they need to do and understand the central role that their core systems play. Systems integration must go to a new level, says Breading, tapping into the gold mine of information that is resident in core systems and then combining that data with sales, marketing, and servicing insight—in real-time, in the right context.
Get Smart: Start With Core Systems and Unify Operations
The best place to get started is within your core systems. Much of the data needed to begin this customer engagement journey already resides within insurers’ core systems, and many of the technologies needed for meaningful customer interactions can be also, added co-panelist Philippe Lafreniere, SVP, EIS Group.
Overcoming the disconnect between front and back office lies at the crux of the solution, says Lafreniere. He proposes a more unified approach to core systems development, integration and implementation that extends beyond core operations to include sales and marketing, unifying the front and back office, breaking down traditional silos. This enables informed, smarter interactions making every touch point optimally meaningful and valuable.
Can You Pass a Core Customer Intelligence Test?
Let’s put this in terms of a simple core intelligence test. The first part of the test is comprehension. Can you access and understand all the data in your core systems? A common data model for all components is essential to the task. Party modeling – which can create and expose relationships between entities, within core systems, such as policyholders, locations and businesses – is also extremely helpful.
The second part is analysis. Can you use the information you have learned to draw conclusions about next best actions? A unified solution enables such things as the segmentation of customers using core data, the creation and management of marketing campaigns, the real-time import of campaign data, and the application of business rules that examine the customer portfolio to determine a candidate for a campaign or engagement event trigger.
The third part is defining the solution, or in this case, taking the best action. Can you offer value by generating meaningful interactions at the right time in the course of any quoting or customer query, policy, billing, or claims servicing scenario? This means executing marketing campaigns and engagement that is enabled by event triggers and sales and marketing interaction configuration points built into policyholder lifecycle transactions.
What is your score? If you feel like a passing grade requires a little more study, download copies of the IASA 2016 presentation, “Core Customer Intelligence at Work = True Customer-Centricity for Insurers," the SMA research paper, “Achieving the Ultimate 360 Insurance Experience”, or the IBM Institute for Business Value paper, “Capturing Hearts, Minds and Market Share.”