The new hotness: CRM in insurance
- Posted on October 15, 2015
CRM’s role in insurance makes me think of the film Men in Black II from 2002. In the scene where Agent K, despite having amnesia, intuitively believes he should drive the flashy new company car, the now experienced, but still junior Agent J explains in simple terms why in fact the keys belong to him:
[Agent J, pointing at agent K] “Old and busted”
[Agent J, pointing at himself] “New hotness”
A little dismissive perhaps, but ‘old and busted’ invariably does make way for ‘new hotness.’ The same can be said about CRM. The monolithic beasts circa 2000 are making way in insurance for CRM systems that are much more agile, more connected and more scalable than their predecessors. Yes, CRM still maintains the core capabilities of managing relationships, but it now also acts as a hub to surface and organize external data, predictive analytic results, structured and semi-structured data, mobile touchpoints and digital marketing and outreach campaigns.
Today’s CRM connects information and exposes a rich palette of customer-centric insight for the benefit of people and systems across functional boundaries. Unlike the older systems, the new class of CRM, especially cloud-based CRM, can easily start by addressing a single business problem, say increasing customer loyalty by making touchpoints more relevant and effective. From there it can be incrementally expanded to include lead gen and upsell campaigns, claims handling, call center activity and so on. Incremental expansion is easier on the budget, but more importantly, makes organizational change easier to manage.
Avanade recently co-sponsored research to look at the role CRM is playing at North American insurance companies (see below). We found that between 2013 and 2014, the number of insurers that planned to implement new CRM environments, both net new and replacement, ballooned by over 300% -- from 4% overall to 13% with an additional 17% planning on making enhancements to their existing environments. Almost 40% of the surveyed insurers plan on year over year increases in CRM spend throughout 2018, both an indication of the important role of CRM but also that companies are looking to grow their capability incrementally.
When we looked at the top three reasons insurers are planning to implement CRM, there was little surprise that managing relationships in a digital world, increasing overall sales and improving customer experience showed up. These are the same themes we see when companies talk about digital business transformation and increasing focus on the customer.
The Agent K’s of the world are by no means irrelevant, but it is the Agent J’s that are optimized to address the new class of business issues facing insurers today.