Financial services

Feature:

Pulling it all together

24 May 2010

As insurers become increasingly focused on offering superior customer service, the need for better access to information across different channels becomes paramount to success. Lindsay James Reports.

At a time when customer confidence is low, insurers are realising that they need to up their game in order to survive. In fact, a recent report by Deloitte highlights that 72 per cent of customers have a different view of the insurance industry following the financial crisis, and 21 per cent trust their insurer less.

With this in mind, today’s insurers are realising that what can really set them apart from the rest is good customer service. If a customer feels that he or she is understood, and getting a truly personalised offering, then they are much more likely to be loyal. And in insurance, loyalty means a lot.

Brad Prodger, industry solutions manager for advisory services at Microsoft, agrees that insurers across the globe need to return their focus to the customer. “Over the last few years there’s been a loss of faith from customers, both individual and commercial,” he says. “With this in mind, insurers have to move away from the product-focused nature of the industry and start to adapt their advice to be more customer centric.”

Mark McQueen, insurance partner at Deloitte, concurs: “Insurers must improve the customer experience in order to strengthen their reputation and brand. According to our research, only 53 per cent of customers said they were satisfied with their claims handling experience – this figure certainly signals room for improvement within the industry.”

We believe that tomorrow’s winners master the customer journey, efficiency and operational control.

Bjorn Holmthorsson, Five Degrees To do this, however, isn’t as simple as it sounds. Gordon Ejsmond-Frey, Microsoft’s insurance industry manager for EMEA, says that there are more products on the market than ever before, with an increasing number of add-ons to opt in or out of. “Product tailoring to meet specific needs is commonplace,” he says. “But, in order to offer good advice, insurers need a much more comprehensive understanding of products, so that they can match up the right policy to the right person.”

But this is far from being the only challenge. With the growth of the online channel, customers are now able to carry out price comparisons online and find out key facts about a policy. “Self serve over the Internet has permeated every other consumer facing industry, and finance is no exception,” says Ben Goss, CEO at Distribution Technology. “The problem with more complex insurance products is that they require an understanding of individual needs, customers can’t simply purchase based on rate or brand. Customers know this and as a result seek out further advice.”

When looking for additional guidance, customers may call an insurer to ask questions before they make a purchase. Advisors therefore need to be able to understand the interaction that a customer has already had with their brand across various channels in order to offer a truly personal experience and to close the deal. “All insurers have got to be able to access information about a customer’s interactions through a number of different channels,” says Ejsmond-Frey. “They need to understand the policies a customer has already, if they’ve had any interaction with a call centre, as well as the results of any fact finding they’ve done online.”

Bjorn Holmthorsson, chief architect at Five Degrees, explains further: “Customers expect their financial provider and its agents to have access to all data, status and processes in relation to the services they provide. Speed is also high on the list; customers require much faster and flawless handling of their cases.”

“Advisory services need to focus on the complete lifecycle of servicing a customer in order to enhance customer retention,” adds Pradeep Shilige, senior vice president for the insurance practice at Cognizant. “At the heart of good advisory services is a better understanding of the needs of customers. A huge amount of information is collected about insurance customers, but what is missing is the actionable insight that can assist insurers in providing the right advice.”

It’s apparent, then, that giving good customer service requires advisors to have a complete understanding of their products, as well as a holistic view of their customers across multiple channels. But for many insurers, legacy systems stand in the way. “In order to manage client relationships and provide comprehensive services, agents and brokers must interact with several different components of functionality,” explains Prodger. “Agents may have separate systems for client profiling, underwriting, rating and illustrations, credit screening, policy issuance and renewal, and claims; and that’s before we even start to think about information from multiple channels. Going in and out of these different systems and juggling information is extremely counterproductive.”

Debbie Baker, sales and marketing director at RDT, echoes Prodger’s thoughts: “Developing and maintaining a genuinely customer-centric approach to business can be difficult for insurers and brokers – especially those operating on one or more legacy systems. The lack of a single, centralised database with no facility to capture and analyse a complete customer history and preferences can make it difficult to spot and act on cross- and up-selling opportunities.”

Craig Saint-Amour, vice president for North America Sales at Figlo, argues that today’s insurance advisors are trying to service the 2010 client with 2001 and even older technology. “2001 technology cannot keep up with 2010’s rapid pace and sudden shifts in the world’s financial and economic market positions. What’s more, it cannot keep up with customers’ demands for real-time information and communication from their advisor.”

Clearly this is a huge problem for the industry, but there is a solution. The leading insurance companies are addressing the challenges described above by using integrated technology solutions, which allow true transparency regarding their customers’ characteristics, products, claims and even future tendencies.

“The smart insurers acknowledge that, although there’s a lot of legacy technology, there are some really powerful solutions out there that can take information from all of the different systems and integrate it so that it can be viewed from one portal,” says Ejsmond-Frey. “Technology like that from Microsoft is bringing together the information that advisors need and presenting it in a coherent way. We integrate into the current enterprise environment and expose all relevant information to the agent or the broker through a workflow-enabled portal leveraging intuitive and familiar tools – including Dynamics, SharePoint and Windows Presentation Foundation technologies.”

“We believe that tomorrow’s winners master the customer journey, efficiency and operational control,” says Holmthorsson. “This can be achieved with superior automated client-driven processes and workflow management, centralised data management and communication management. All these functions are managed with a modern mid-office solution, not in product oriented back-office systems.”

A case in point is Lebanese insurance business Arope. Agents at the company were struggling to cope with an expanding customer base, which had recently hit 40,000 people. Existing paper-based systems meant that tracing customer histories was often a slow process and risked multiple employees contacting the same customer. To solve these issues, the company worked with Microsoft Gold Partner Netways to implement Microsoft Dynamics CRM to integrate with the company’s core policy management system. Now the sales team is better equipped to check customer activity, view policy information and produce detailed reports from single data entry. Users are already saving at least two hours each week from reduced administration. Overall, the project coordinator predicts that the sales team’s productivity has increased by 15 per cent.

Partners are also adding value to Microsoft solutions by developing extra capabilities. Take RDT’s customer relationship management solution Landscape.CRM, for example. “Landscape.CRM is a solution that provides the tools and capabilities needed for an insurer to create and maintain a clear picture of its broker portfolio, from first contact right through initial trading and post-sales,” explains Baker.

RDT’s chief executive Mark Bates continues: “Insurers can use Landscape.CRM to build a clear picture of their highest performing relationships, assess the scope for increasing volumes with these particular brokers and then create marketing campaigns to target and support those brokers, as well as measure the effectiveness of each campaign. Insurers can also use Landscape.CRM to enhance general administration with their brokers across the board, by managing contracts, documenting requests and recording all correspondence – be it e-mail, phone or letter. And because Landscape.CRM is based on Microsoft CRM 4.0, users can create workflows and reports without technical support, using wizard-based tools that are familiar and easy to use.”

SunGard’s iWorks EIM solution is another example. “SunGard and Microsoft partnered to develop analytics capabilities for iWorks EIM, an incentive compensation management tool for insurers,” explains the company’s senior vice president Kevin Singerman. “iWorks EIM Analytics provides configurable key performance indicators and interactive business intelligence dashboards to help insurers manage their distribution channels, understand market dynamics and quickly adapt business tactics accordingly. The new analytics module provides comprehensive analytics capabilities across the enterprise. Microsoft technologies are used throughout the iWorks Distribution suite of solutions including Microsoft .NET, Internet Information Services, SharePoint and PerformancePoint to name but a few.”

India-based micro transaction technology firm Gradatim IT Ventures has also built on Microsoft technologies, including SQL Server 2008, .NET and Visual Studio 2008, to create its micro-insurance platform MF-Insure. The solution is designed to consolidate and simplify the various business operations of micro-insurance providers spanning the life, health, non-life and pension lines of business. CV Prakash, CEO at the company explains: “At Gradatim, it is our constant endeavour to develop innovative and user-friendly IT platforms in order to simplify end-to-end insurance operations. MF-Insure is a pioneering platform and is expected to play a critical role by simplifying and consolidating business operations, reducing cost, improving turnaround times and other operational advantages, thus enabling insurance providers, agents and distributors to offer affordable insurance services.”

With technologies like these from Microsoft and its partners, insurers can achieve significant benefits. They can shift their emphasis from cumbersome administrative activities to more value-added advisory services. “The better an organisation can identify, deploy and leverage its information assets to offer more relevant, appropriate and precisely defined products and services, the greater will be its ability to demonstrate competitive advantage,” explains Martyn Davis of Aia Software. “Conversely, failure to do so will mean lost opportunity, consequential loss of business and ultimately, unfavourable comparison with the competition in an increasingly challenging market.”

“These technologies help insurers build solutions that give them a competitive edge by providing specific, insightful information,” says Cognizant’s Shilige. “Advisors can use this information to recommend the right products, thereby increasing business sales and market share.”

By increasing operational efficiencies and streamlining silo-hopping and paper-intensive document processing, these solutions better enable advisors to attract and serve customers and increase client retention and revenue. Using the platform gives advisors more time to work on best practices, learn about and fulfil proposals with an ever-widening range of financial instruments, spend more time with current and prospective clients, and expand available services.

“When all systems are pulled together and interoperate in a way that mimics business workflows and work the way financial advisors do, that’s when you start hitting a home run on productivity and providing superior customer service,” says Prodger. “Microsoft focuses on helping financial organisations to leverage technology to amplify the impact enterprises and advisors can deliver to drive business success. We help enterprises decrease total cost of ownership, reduce risk and drive innovation while empowering financial advisors with powerful tools that help develop trusted relationships and increase revenue.”

Looking to the future, Shilige says that advisory services will need to expand their scope to address a wider spectrum of customer touch points and provide quicker customer responses. “Technologies will enable better customer insights, including proactive engagement of customers and prospects, improved customer service and increased transparency and collaboration across multiple stakeholders in insurance transactions.”

Singermann believes that the move towards these technologies will see the start of a very exciting time for insurers. “We expect that insurers will continue to focus on improving their distribution organisation well into the future,” he says. “Technology will certainly keep pace, as insurers evaluate new methods to improve producer servicing. We will keep an eye on three key trends. One, advances in social networking will provide insurers with additional insight into markets and customer behaviour. Two, mobile computing, particularly in emerging markets like India, will be the next frontier as more and more producers will rely on PDAs and smart phones to more effectively communicate with clients while on the road. And lastly, cloud computing will provide a new platform for delivering application services on a ‘pay-as-you-go’ or ‘on-demand’ model making these offerings more affordable for smaller insurers.”

Prodger agrees that the cloud will have a significant role to play in the future: “In this space there are a lot of developments happening, but the most important thing is that insurers get their arms around a true straight through processing environment. Ultimately there is going to be a lot of mainframe modernisation – major components of these systems are going to begin to be improved. Once this is the case then carriers can look at offloading some of the high performance computing burden, such as actuarial analysis, to the cloud. This will allow insurers to not only save money, but to focus more of their efforts on the most important aspect of their business – their customers.”

This article first appeared in the Summer 2010 edition of Finance on Windows.

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