11:30 AM
Kate Gingras
Kate Gingras

Becoming Customer-Centric, Not Product-Centric

New technology can ensure that your customers get the products they require, rather than being force-fit into a product option that's not right for them.

Leaders in the insurance industry know that matching products in their portfolio to individual client’s or prospect’s needs is critical. Ideally, this should be an automated process that considers each client’s particular circumstances. A customer-centric way to rethink your business processes is an accelerator for your success. It enables agents to educate prospects on the proper offerings, and helps bring gap filling products to market quicker.

Marketing suitably to the right person at the right price has been a notoriously hit or miss situation. The industry needs to improve the sales cycle, streamlining the proposal process.

Unfortunately, the algorithms some companies use to connect customer needs to product offerings have been unreliable. That has led to somewhat dismal customer retention news for us all.

In 2011, a global study by Accenture on customer-driven innovation in the insurance industry showed a significant drop in customer satisfaction – down from 21% only two years earlier. Of the 7,000 consumers around the world polled, 26% admitted to having no insurer loyalty to their insurers. What’s more, 33% were unlikely to recommend their life insurance providers to others, and only 17% were sure that they would buy more products from their current providers. Some 26% would definitely consider shopping around for better deals.

The survey concluded that “to achieve the capabilities needed to understand customers, and provide the products, services, and channels they prefer, insurers must have an underlying back-end infrastructure that is simple yet sophisticated.” The infrastructure would need to support multiple channels, multiple products, and multiple servicing locations.

Core capabilities of such an overarching infrastructure must include product definition, rating, and pricing with a high degree of scalability and work across the multiple systems used by individual agents. For this approach to be successful, the infrastructure should be able to make best use of cloud technology so that all concerned can access capabilities and product offerings without straining on-premises resources.

[Previously from Gingras: Building Customer Acquisition and Retention Platforms.]

“Anything that impedes agility and stands in the way of giving customers what they want should be identified and carefully considered for elimination,” Accenture wrote. “Legacy product-centric organizations should be dispensed with to facilitate a truly solution-centric approach to products, services, prices, and channels.”

It’s simple: To improve customer retention and to offer prospects the right combination of products that suit their needs, it’s important to automate processes for greater efficiency and better targeting. Process efficiency puts the emphasis on customers, not products, for the best service. That’s possible now with newly emerging work platforms that allow custom applications to be built with virtually push-button simplicity. These work platforms not only take advantage of cloud and social technology (for much better collaboration within the organization) while also integrating with legacy applications, if necessary.

Let’s not despair about the flight of customers from their long-time insurance providers. Let’s instead focus on ways to introduce the products they really need, when they need them. New technology can ensure that your customers get the products they require, rather than being force-fit into a product option that’s not right for them.

Kate Gingras is Global Practice Leader, Insurance, for Appian, a BPM software provider. View Full Bio

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User Rank: Author
11/14/2014 | 3:20:21 PM
Re: Customer Centricity
Interesting insights, Robert, thanks for sharing. I've also noticed that despite all the talk about customer centricity in insurance, there seems to be little practical application of it. Through big data analytics, insurers can improve engagement, efficiency and personalization in their customer experience strategies.
User Rank: Apprentice
11/13/2014 | 11:59:49 PM
Customer Centricity
Both Gartner in their 2013 survey and the Economist Intelligence Unit in their June 2014 survey of more than 338 senior insurance executives place better customer centricity and improving the front office customer buying experience as top priorities for insurance carriers.

"A majority (60%) of The Economist Intelligence Unit's survey respondents expect significant to massive change in the industry. 

Whatever the broader potential for change, insurers say some of their most immediate challenges and opportunities stem from changing customer behaviour. A plurality (42%) of respondents say the front office—the part of the organisation closest to customers—is the most vulnerable to disruption, and many see their own organisations as least prepared for change in that area.

When posed with a number of statements about the form that disruption would take, the one with the highest level of agreement was the following: "Companies that fail to simplify, streamline and improve the buyer's experience will not survive." 

Fortunately, cloud-based technology is available today that can both understand and interpret customer data, behaviour and preferences (as a human advisor would), and also manage the complexities of delivering relevant information, products and purchase information that is personalized and compliant for each consumer, regardless of the product, state, or legal requirements. The technology combines real time data (and behavioural information) with a configurable rules engine, and an enterprise content management system, with self-learning algorithms that can emulate and improve on face-to-face selling and customer engagement. Each client receives a unique and dynamic web-user experience (PURL), which becomes the unified customer portal for all customer interactions, from marketing, to policy information, to claims, with direct links to the agent or broker to allow collaborative advice and help.

In our experience there is a great deal of talk about customer-centricity, but limited practical understanding or implementation, certainly amongst the majority of insurance carriers, despite the recognition of its importance. The insurance industry has great opportunity to change and improve the customer experience at every level, and it requires a system that combines real time data analytics, with inbuilt intelligence to respond to each situation in the optimal manner. Big data combined with the ability to deliver a highly personalized, relevant and compliant response in real time to each unique customer (as a proficient advisor would), is of huge value. The key to improving both market both efficiency and customer engagement is to combine data analytics with the ability to steer and influence customer behaviour, whether it's improving the sales experience, or anything else. New cloud-based technology allows insurance providers to make this change to customer-centricity today, without major IT resource, without disruption to existing systems, and at low cost and low risk, with the ability to scale whenever the time is right.

Robert Paterson is Chairman and co-founder of Afinium, a technology service provider to many of the largest US insurance carriers.

User Rank: Author
10/30/2014 | 3:55:23 PM
Re: Loyalty lacking
While I agree that agility and customer preferences should be top priorities, Nate makes a good (though unfortunate) point. Many people only interact with their insurers under unfortunate circumstances, and even the smallest error could cause a stressed-out customer to shop around for another carrier. 
Nathan Golia
Nathan Golia,
User Rank: Author
10/30/2014 | 1:06:50 PM
Loyalty lacking
You don't have to go back to 2011: There was recently an article entitled "Why even a routine claim could cost insurers a customer" (or something like that) on TIME. Unfortunately, working in insurance means customer interaction happens at tough times for them, and it's hard for any relationship to survive.
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