4 Ways to Ensure your CRM for Insurance is Future-proof

Keeping the Customer Satisfied
Insurance is a unique product – this product is personalized for each customer and that personalization is based on knowledge of each customer’s needs and their relationship to the company as a whole. As insurance options increase and customers demand more personalized service the ability to make a sale depends heavily on this first-hand knowledge of the customer. Historically, insurance companies faced little or no competition outside of their own industry. With the repeal of the Glass-Steagle Act in 1999, insurance companies now face competition from banks and brokerage houses. For insurance companies this meant that they needed even greater knowledge of their customers and what their customers desired.

With the current economic environment, impacting the ability and desire to invest, the insurance representative realizes how narrow the window is in contacting the customer, holding the customers attention and being able to cross sell or upsell products to that customer.To compete in this new market place the insurance company must have an intense focus on delivering superior customer service. To do this they must have superior customer knowledge.

Know your customer
Insurance, by the very nature of the product, needs a lot of customer information. The insurer would know the policies the customer has, the claims the customer has made, and where the customer is in the life cycle. What they may not know, however, is what other policies the customer holds with their company. The agent who is selling life insurance to this customer may not be the same agent selling automobile insurance to them. This fragmented information inhibits the ability of agents to cross sell or up sell to the client. In many cases where agents are working strictly on commission basis the incentive to “share” customer information becomes a dis-incentive, as information sharing can result in lost commissions.

With fragmented information how can the insurance company be guaranteed the customer receives the superior customer service required to maintain, retain and increase the value of the relationship? This is where a customer relationship management, an Insurance CRM, system becomes a vital tool in the strategy of the insurance company.

Predicting Customer Behavior
While most insurance companies and their agents understand the need for a single, real-time view of their customers very few have the ability to do this. Consider the ability to cross sell without knowing what your customer already has or needs – it’s like trying to sell car insurance to someone who doesn’t own a car. Although this is an extreme example, by not having a single real time view of the customer the ability to predict their behaviour and their needs diminishes significantly. 

With a CRM system in place this knowledge becomes available to all agents in the ecosystem of the organization. This concatenation of customer information moves the agency and it’s agents to a more holistic customer approach, which in turn can lead to increased customer satisfaction, customer retention and the ability to attract new profitable customers. Also the insurance company is able to manage the distribution channel in a smarter way which can prove to be a significant competitive advantage.

By mining the CRM database the company is able to profile their current customers based on past purchase, claims data and customer specific information. Overlay on to this readily available third party demographic information and the company will have a predictive profile. By using past customer information coupled with demographic information the insurance company can begin to mine areas of the population for new customers based on the predictive factors available through CRM.

This data mining can also be used in the cross selling or up selling of products to current clients. By using life cycle predictors and past purchase history it will allow agents to examine their current customer base by likely hood to purchase a product based on life cycle stage. For example, knowing the median age and income of the home owner insurance base will enable an agent to engage a customer potentially entering the home owner market prior to the actual requirement for home owner insurance. This proactive predictive approach enables the agent to provide the superior customer service their clients require in order to maintain loyalty to the company.

Keeping costs in line with growth
As the company grows, how can they continually maintain their profitability?

Predictive selling, as described above, will enable agents to spend the right amount of time with the right customers. By doing so, the agents are more likely to increase sales volumes while maintaining a reasonable cost for time and effort.

If, however, the insurance CRM system is not tied to the core systems of the company this can be a problem. The agents require real time statistics about both policy information and claims information. This means the CRM system must be tied to all other systems – the insurance CRM system must be updated with relevant information such as expert appraisals, medical information, and change in household status without the agent being responsible for data input. The reduction of the paper trail of this type of information will free up the agents for predictive selling – increasing profits while keeping costs within desired margins.

With integrated CRM in insurance, the company can predict the needs of its current customer base while providing solid leads for growth in the portfolio. This investment in the future will support the on-going development of the distribution channel and will return the investment dollars in future profits and customer retention.