Risk is a relative concept.
When it comes to innovation, the insurance industry often gets a bum rap: slow to change, reactionary. One Dreamforce 2011 session, “The Next Generation of Insurance,” was even subtitled “Rethinking a Laggard Industry.”
Now, the insurance industry may be slow, but I’d never label it as lagging. Relatively speaking, the industry has been fairly aggressive in introducing new products and services to meet its customers’ needs. (Note I’m speaking here not about the health insurance industry, which is its own, unique space–especially with the Obama healthcare law now in play–but rather companies that sell life insurance, as well as non-life, general, and property or casualty insurance.)
Of course, the insurance industry is also built on the notion that it’s managing risk. By avoiding risky bets, insurers have historically made money, because they’ve been able to invest the money from customers’ premiums, and pay out less than they take in, thus generating profits. With a sure bet, why should the industry risk changing too quickly?
The problem for insurance companies, however, is that worldwide stock market performance has been fairly poor for some time, and it’s not forecast to get better anytime soon. Accordingly, the industry’s typical revenue-generation mechanism hasn’t been performing up to historical standards. That creates pressure on insurance companies to offset their lack of investment returns by lowering operating costs and finding new ways to increase revenue.
How CRM Helps Lower Costs And Increase Profits
Enter CRM. In fact, those business requirements have been the driving force behind most of the insurance projects in which Innoveer has participated. In general, we’re seeing insurers largely focus on these four types of customer-focused projects:
- Contact center optimization: For insurance companies, their first customer-service goal is to ensure that all inbound calls get solved by the member services agent who first picks up the phone. Of course, insurers have been focusing on the contact center for some time. But they’re coming back, since more business is now happening online, and especially on Facebook and Twitter. In addition, there continues to be a clear relationship between technology investments and business returns, as expressed by the number of calls per hour that agents can handle.
- Sales force transformation: Insurance companies often change and adapt their products to suit the needs of evolving markets, and to capitalize on new opportunities. For example, the life insurance industry has become expert at handling the complicated payouts that can be required after one of their policyholders dies. But to keep retooling their products and services, insurers typically require more flexible sales automation tools, not least to enable salespeople to remain up to date on all of the latest offerings.
- Mobile sales automation: Which salesperson today doesn’t sport a smartphone, tablet, or several of each? Accordingly, one prominent life insurance firm recently tapped Innoveer to help make its CRM software more mobile. The business driver is simple: to provide field agents with rapid access to complete customer and broker details, so they can more rapidly court customers with profitable proposals.
- Social Monitoring: While insurers aren’t adopting social technology as quickly as some other industries, such as high-tech companies, they are beginning to pursue projects that help them monitor social networks for favorable mentions, as well as distraught customers who need assistance.
Risk Versus Reward Demands Action
As these projects demonstrate, when it comes to lowering operating costs and increasing revenues, insurance companies aren’t afraid to revise their business practices and adopt the latest CRM approaches and technology. Because to reap rewards, it’s important to manage risks. And for almost any industry, including insurance, doing nothing–in the face of changing market conditions and a difficult economy–can be the biggest risk of all.
Post and thumbnail photos courtesy of Flickr user BobaliciousLondon.
