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« Service Capital: Fuel for Insurance Industry - Part 1 | Main | Future of Business & Commerce in next decade: Part 1 »

Service Capital: Fuel for Insurance Industry - Part 2

By Prashanth N.

We are at the dawn of "Big Data" era. Data is available in plenty; internet traffic is expected to reach 667 Exabyte by 2013. Powerful analytic tools are also under development like in-memory computing technology Hana by SAP or Oracle Exalytics. There are analytic tools to handle the unstructured data from social network for example "sentiment analysis tool" by SAP which can be used to analyze comments on social networking sites. For insurers this could solve dual problems; they could develop new products customized to needs of client and also detect fraud. Insurers are looking at developing 'Social-Risk-Profile' to proactively detect frauds or fraudulent behavior of their customers. Future/current needs of insured could be derived from the kind of social activity, customers could be categorized into groups and products could be modeled to suit the characteristics of the groups.

Focusing on Business Associates (Agents, Brokers and etc.) involved in business is imperative as they are link between customers and insurer. If a Stephen Gutting (Agent, Historic Square Agency)  says he drives 95% of premium volume with Erie insurance; implies maintain rapport with Business associates is profitable. Levying target pressures is not only the way to derive business; suitable support to sales process would encourage better sales. One in two customers changed company because of bad call center experience and tend to keep customer service their primary requirement [4]. Call center personal, Agents, Brokers are point of contact between insurer and insured who help build healthy customer relationship. Ease to access the company, suitable access to information would encourage business associates to deliver better results; also supported by McKinsey & Company survey [5]. The Insurers must change their view of associates being Premium-Bearers to them being Brand-Enthusiasts.

When a customer buys a policy, they want value form their purchase. Value is what a customer gains over what he has to forgo; Customer gains promise of good coverage during financial emergency and they pay a premium for it. The customer expects transparency in this deal; they do not want to be cheated at time of emergency when insurers deny them coverage based on some fine print on the insurance contract. They would prefer all clauses, all coverage details, claims process, riders if any and payment terms explained in simple terms at the time of purchase. Such a transparent communication helps build trust and trust needs to be reinforced when a claim is made. During claim process, customer need to be informed about status of their claim, value of coverage, claim adjuster's report and settlement details. Customer may accept delayed claim payments, given that they are informed regularly about the status of their claim.

Consistency in customer service is required to have sustained growth in insurance business; 'Service Capital' takes years to build and may be ruined due to one instance. If an Insurer would warn its customers about an incoming hailstorm and request them to keep of the region; such a portrayal of care to customer often results in customer delight. Customer Service expectations are rising, increasingly influenced by service offerings in other industries, such as healthcare and banking. Most the Insurance products have comparable benefits and often generate similar returns; customer service is the key differentiator for Insurers.

[4] 2007 Genesys USA Consumer Survey
[5] www.genesys.com

About the Author: Prashant N. is an Associate Consultant with the SAP practice in FSI domain.

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