SAPPOV: Owning the Customer Relationship
Guest blog by Norman Black, EMEA Insurance Industry Director, SAP
Customer centricity in EMEA
The ‘consumerisation of IT’ continues at a pace. Not long ago, companies could dictate how customers did business with them – the processes they had to follow and the channels they had to go through. Now, companies in all industries are being forced to respond to and adopt technologies – mobile, tablets, social networking – that are less circuitous, less process-heavy and more convenient to the consumer.
It’s a worry, because it seems that the insurance industry is being left behind. Consumers’ expectations of what customer service should be like in insurance are increasingly being set by their experiences in other sectors, such as retail, telecoms and travel. Policyholders now approach their insurance companies in hopes of highly accessible, responsive, customised service. Often they are disappointed.
The situation is frustrating, particularly since the insurance sector was among the earliest adopters of IT for commercial purposes back in the 60s and 70s. Ironically the legacy of older systems has now become one of the main obstacles in moving forward.
There are some promising advances. Insurers have done a lot to improve the claims process – but of course claims is an expensive place to demonstrate service! The real trend is the move away from blanket coverage and fix-all policies and towards simple, bespoke policies that are easy to consume. And ultimately that leads to a much more efficient and cheaper process.
Think of how happy most people are to book flights online – as consumers we welcome the flexibility, choice and speed that this gives us, but we are in effect doing the airlines’ work for them! Excellent customer service can also mean cheaper customer service.
Re-engaging with policyholders is also crucial. One inevitable consequence of price awareness websites is a loss of customer loyalty. Policy holders are increasingly promiscuous, and getting intimate with people who are used to being promiscuous is tricky. However, one thing they do still value is brand. So reputation – and the way the brand is managed – is vital, whether through social networks, word of mouth or claims processing.
A shift in style brings opportunities. For example, insurers could use the phone more to talk to customers, mining ‘big data’ about them and feeding it back to help them get better deals. The early experience with usage-based insurance is that people will be prepared to share more of their data if the deal is right (this is the Facebook generation after all). Its growth would allow insurers to make compelling offers on a monthly basis – just like a mobile phone company – and radically change the game in customer relationships and policy-holder behaviour.
From the personal to the global level, the insurance industry needs to re-present itself, adopting technology to understand and respond to its customers. With some of the best practice being seen in other industry sectors, insurers should perhaps be talking much more to solution providers who operate in other industries as well as insurance (traditionally, they have valued many suppliers who ‘only do insurance’ – but that is arguably part of the problem). The ability to provide business process solutions combined with key technologies such as mobile is crucial.
Insurance is a huge global good – fundamental to supporting people and companies. Giving people what they want, when they want it is the real trend and challenge.
To learn more about we can help you with your business challenges please look at SAP’s Solution Explorer for the Insurance Industry. What trends are you seeing? Continue the conversation in the comments below and on Twitter @SAPForInsurance.