4 Key Reasons for Implementing CRM in Insurance

Insurance is a volatile sector. Reputations can be damaged and restored within a span of months and government imposed regulations can make margins appear and disappear almost magically. The sector however is one of the most dynamic in the Indian business landscape and the keenness of international players to invest in it bears testimony to the massive potential it holds. In the domestic space too, there have been some massive transformations, LIC faced competition for the first time in decades in the life insurance segment with the pie in the non-life and health insurance segments being shared equally. 

These developments in the sector have made it even more important for companies to be abreast of the latest tools and solutions so that they can be a part of the race where some of the best names in the international market have already made their presence felt. 

With the lobbying for removal of the FDI cap of 26% in insurance getting more intense by the day, it is clear that the sector is on an upward incline for a major boom. Streamlining business operations and managing customer data therefore have assumed more importance than ever - the role of CRM in insurance sector is now crucial.

The winning factor
While the banking sector’s business does not completely depend on the customer database, the insurance sector cannot exist without a solid set of databases that include existing customers as well as prospective ones. Procuring these databases is also a major challenge in this sector and therefore optimum utilization and proper management of the data could well be the winning or losing factor for a player. In an industry where the competition is so intense, making customer related data accessible to the sales, management and customer service team in the most efficient, cost-effective and timely manner is a challenge for any CRM solution provider.

While there are several players in the market, only a few have made a solid market presence that looks sustainable for the next decade. It is also important to note in this case that the total market share of the private players doubled as recently as the last six years. Though most of these players boast of state-of-the-art CRM software, the solutions have evolved with the market. 

Today, cold calling is no more quintessential for cross-selling and up-selling, customer relations is no longer about the person that walks into the office but about long term relations built through wealth advice and high quality service. Ensuring that the firm is in line with the IRDA regulations and there is ample scope for the launch of a new marketing strategy is no longer a decision made randomly by the board, but a logical deduction from the CRM data that is on the table today.

Integration and segregation
Two of the biggest functions of CRM in the present market scenario are therefore integration and segregation. Integration of the data from across the various departments and technical, meticulous and efficient segregation of this data related to claims, policy holders, expired/ new policies, corporate clients, prospective clients, third party policy sellers and agents among others is thus essential. 

A company choosing to upgrade their existing CRM or implementing a new one to keep up with competition should therefore look for high levels of customization when it comes to these two processes.

Customer grievances
No matter how good an enterprise’s CRM solution, sales, marketing and customer service department, grievances will remain. While 100% customer satisfaction and claim settlement is an illusion, companies have no choice but to strive for it.

Some of the common complaints against insurance companies remain delays in claim settlements, inefficient customer care officers, cumbersome paperwork and opaque claims processing routines. Insurance players in the health and life insurance space have to be doubly careful when it comes to handling customers, sentiments can run high and the media can be quick to spread disrepute. 

Single point of contact for most departments related to customers, easier navigation, interactive online and telephonic presence with friendlier call center executives are some of the solutions that can be implemented apart from high-end CRM solutions.

Changing landscape
The customer today has more money and knowledge than ever before. Impressing them with typical CRM tools like seasonal and birthday greetings is no longer effective. The need of the hour is comprehensive KYC packages where personalized and customized services are provided. With the rapid expansion of the customer base, risk management has also emerged as a major challenge and CRM solutions can go a long way in helping companies implement effective measures to manage risks. 

Solid portfolio management used to be a manual process even a few years ago as there was a great deal of analysis and inference involved. Today, however, CRM solutions have the power to replace the analyst and come up with inferences that can help the sales team make clear decisions.

New changes such as health insurance portability and the emergence of social media and RTI have made the insurance sector a large yet competitive terrain. Foreign investors know that a majority of the 121 crore population in India is yet to be insured and it is one of the biggest in the world. Solution providers for CRM in insurance sector are likely to look at the potential of this market and therefore come up with better-customized, efficient, real-time and cost-effective solutions for the insurance sector with special features for Big Data, social CRM, email syndication, two-way SMS and more.