No Magic Bullet

I was reading an article in an insurance technology magazine and was somewhat startled to see that an insurance executive mentioned that they were looking to customer house-holding to generate more sales. I’m defining house-holding as the ability to pull together all of the insurer’s customers living at the same address with all of the insurance policies they have purchased from the insurer.

I agree with the philosophy that house-holding is important to generate increased sales (and better customer service as well).

I was startled because when I was at John Hancock in the mid-1980s we were challenged to come up with a house-holding solution. We wanted to be able to drive more sales, of course, but we also wanted to identify how many customers had purchased more than one of our insurance products.

I would have assumed (yes, I know what “assume” means) that every insurance company did customer house-holding today (3 decades later) just as every insurance company is geo-coding every address in their core administration, channel management and compensation, financial, and other system records. (Allow me to enjoy my own dream-world.)

But the insurance executive’s comment led me to thinking about …

No Magic Bullet

I have found throughout my decades of being in the insurance industry that insurers tend to expect technology vendors to deliver magic bullets. For context, I am from the marketing / marketing research side of the insurance industry – not the technology side.)

My clearest memory of this belief in magic bullets comes from my time in the late 1990s at The META Group delving into CRM. Salespeople told me that insurers considered “CRM” to be a dirty word, as it were. Insurers were upset that technology vendors over-promised and under-delivered about CRM’s benefits.

Putting aside that over-promising and under-delivering is what technology vendors do as a matter of course, I believe a significant part of the “blame” concerning CRM rests with insurers themselves.

A lot of hard work

CRM requires a lot of hard work. This remains true whether it was the CRM solutions of decades ago or the current cloud instantiations. It also remains true even if a typical insurer wasn’t a mess of silo-ed systems.

And I mean a lot of hard work by the insurers themselves. Insurers must hold themselves responsible for:

  • the cleanliness of the data that flows into and is stored in their various core administration, channel management, financial and other systems. Not the technology vendors … the insurers.
  • creating (and updating) authorization protocols for access, editing/changing, and deleting customer data
  • identifying the “right” type of data to store and use in CRM systems. I’m thinking here of pictures, sound (phone calls), and video streams whether from the customer or insurer-initiated contact or insurers monitoring their customers’ social media sites for information that can improve customer service, product development, or target marketing. Obviously, insurers need to get customer opt-in approval to collect and use customers’ social media data.

I could go on with the hard work involved with CRM but there are as many examples of other solutions that insurers should be using that also involve hard work: predictive analytics, Big Data, interactive visualization, and GIS to name a few.

My point is …

My point is that with every solution that technology vendors bring to insurers with promises of “saving time” “reducing costs” “creating a competitive edge” or “improving customer experience” there is also a lot of hard work involved … that the insurers will have to accomplish themselves (even if the insurers hire IT consultants or system integrators).

There are no magic bullets ….

What do you think?