CRM Implementation

in Insurance Sector

CRM• Customer satisfaction in any sector is a multi-faceted dimension which

encompasses quality product and value addition through value evidence• CRM, or Customer Relationship Management, is a company-wide

business strategy designed to reduce costs and increase profitability by solidifying customer loyalty

• There are three key elements to a successful CRM initiative: people, process, and technology.

• CRM is perceived as an• Information technology solution for ensuring a better customer services by

increasing business in competitive environment • Meeting the demands of the market • The needs of customers• Evolved as Customer- Centric Philosophy for whole organization

Objectives of CRM• CRM is an organizational strategy to develop mutually

profitable lifelong relationship with the customer• The primary objectives of CRM are to build and maintain a

base of committed customers who are profitable for the organization

• Use technology and human resources to understand the needs and behavior of present and potential customers.

• Acquire, retain and establish mutually rewarding, one to one, relationships with customers.

Objectives of CRM

• Provide better customer service to customers.• Identify high value customers so that the organization can

serve them better with differential service.• Increase customer revenues by cross selling and up

selling.• Simplify marketing and sales processes• Collect customer information at all possible points and

making this information available to the entire organization

Need of CRM in Insurance Industry

• Insurance products are becoming more commoditized.• Presence of numerous players.• Advertising efforts are being countered by comparison portals,

insurance advisors and corporate alignments.• A large share of business is driven through intermediaries where

information challenges exist for effective management.• Companies continue to face stiff revenue targets spread across too

many stakeholders.• Stakeholders struggle to deal with too many processes, systems and

geographies• Speedy documentation and processes at the time of issue of policies• Prompt redressal of customer grievances

PROCESS OF CRM• Redesign Functional Activities • Redesign the functional activities on implementing CRM while

working at cross-purposes functional Departments

• Customer-centric Business Strategy• Plan around customer wants but not company goals, • focus on listening to customers but not forcing them to listen to

you • Promote communication of marketing including database

marketing (e-database marketing, e-database, e-marketing, etc)

CRM Process• CRM Initiative• Introduce new technologies in System• Communicate & Educate employees

• Identifying Customers• Primary Customers : policyholders, beneficiaries, insured, agents

or brokers • clear understanding of each of the customer segments • build an infrastructure and strategy to provide customers with

products and services

• Collecting and owning customer data• Capture and combine customer information from various offices &

sources

Existing CRM Facilities in Indian Insurance Sector

• MAX NEW YORK LIFE• The RATER strategy for its operations and for the

customers• Reliability• Assurance• Tangibles• Empathy• Responsiveness

• CUSTOMER LISTENING SYSTEMS• The company has a customer listening system• The tools used for it are:• Customer satisfaction surveys• Agent satisfaction surveys• Service scorecard (Customer touch point experience)• Customer/Agent issues inventory• Service monitoring questionnaire with policy pack• Complaint questionnaires

VALUE CHAIN• Product development• Customer acquisition• Policy issuance• Post policy servicing• Collections/renewals• Claim settlement• This process is supported by Customer Care/call centres,

IT, F& A, Actuarial, HR &facilities, Marketing and legal processes.

LIFE INSURANCE CORPORATION

• e- CRM software by the help of Wipro and IBM .• CRM project is the largest of its kind in India. • Wipro and IBM work together to compile the data policy holders of

LIC.• Data would reflect consumer behaviour of policy holders, nos of

customers going for loans• Extensive network with a Web front-end to make policy detail and

services more accessible.• EPS (Enterprise Portal System)• Voice-• enable it’s WAN and video• Conferencing solutions

Benefits for LIC• Streamlines processes• Collections via the Web reduce time taken for

transactions & benefited LIC by 12% reduction in costs.• Single point of servicing of the customer.• Single Window Operations for all products and services

for a customer• Customer ID links all policies of a customer from the

branch data base.

HDFC ERGO GENERAL INSURANCE

• With the new system in place, field executives can now upload leads generated from the market, third-party databases, and existing customers into a central repository.

• The sales team then uses the Lead Tracking and Reporting Mechanism tool to manage leads and track these leads across the customer lifecycle, generate various reports for top management

Benefits for HDFC ERGO• The system has given the flexibility to customize the

products according the user's needs.

• A single repository of data enables the company to closely track the sales pipeline and figure out where the gaps are, and how to close them out.

• An increased lead conversion rate which stands at 30%. A 30% conversion rate of 20,000 leads equals 6,000 policies.

Strategies for Success of CRM• Comprehensive Repository• A repository of customer information incorporating data of the entire organization

and all its locations should be created• A system should be built to allow real time data access

• Localize• CRM systems’ mid-point contact software must be in local language for customers

and employees• Should adhere to local security and privacy laws, management of currency related

issues• productive integration of local business processes

• Phased implementation• Single point testing• MNCs must begin with identifying their most successful and revenue generating

country• Reduces risk of failure of overall system

Strategies for Success of CRM• Collaborating with all stakeholders• Organizations should involve existing business partners• business and channel partners offer valuable inputs from their

expertise area • help acquire buy-in for new technologies and processes.

• Integration• Effective cross-channel integration helps all departments to be

actively involved in sales and service through a single customer view

• Integration between front office and back office systems is a must.

• User coaching

Successful CRM Implementation in Insurance Sector

• Reliance General Insurance• Leading provider of Health, Car, Home, Travel and Business

insurance.• Network of over 200 offices spread across 173 cities in 22 states of

India.• Founded in 2000.

• Challenges Faced:• Different processes for different customer segments.• Reorganize and streamline reporting systems.• Eliminate multiple reporting tools and constant data reconciliation.• Implement "one version of the truth" solution across information

silos.

Solution• Effective lead management through direct channel &

telesales• Effective customer servicing by intelligent allocation of cases

to specialist teams & closures within SLA.• Integration between various core systems for effective

customer servicing/operations management.• Lead capture through various source & distribution across

agencies for a quicker inspection & sale of policy.• Sales Force Automation, Marketing Automation, Customer

Service & Support along with Analytics module• Starting with 500 users in 2008, Reliance General Insurance

has now a CRMnext user base of 10000

Benefits

• Enhanced the capabilities of customer servicing by increasing first time right (FTR) and turnaround time (TAT) adherence by 400%.

• Reduced the cost of servicing by a great margin.• Improved lead conversion.• Increased the capability of customer retention.• Reduced time and IT resource requirements for regulatory

reporting.

TATA AIA Life Insurance• Background• Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint

venture company, formed by Tata Sons and AIA Group Limited (AIA).

• It struggled with multiple systems, technologies and stakeholder conflicts. Customer information and processes were fragmented in over 25 systems.

• Challenges• Inter-department coordination• No unified system of customer information available• Manual assignment for premium collections over spreadsheets and

emails created delays • Manual assignment of new applications for verification, validations

• Challenges• Knowledge retention• No effective tracking of channel, branch and vendor persistency and

performance.• Lack of reliable measures to track feedback of customers on products and

service.

• Standard Customer Communication• No standardized platform for communication between internal team and

customers.

• Process control and inefficiency• No single system to monitor new application issuance across all touch-points.• No cataloguing of undelivered or invalid cheques• Manual extraction and analysis of customer data for execution of campaign.• Incorrect capturing of service requests due to lack of validations leading to

increase in wait time for customer

Solution• Convenient New Business Process• Single system for Branch, operations, agents• Reduced departmental dependencies• Pending Management• Policy Dispatch Management

• Integrated Customer Services Process• Across Touch-points - call center, branch, email, web, mail, • Across  Request Types - Enquiry, Complaints, Requests, • Across Departments- Customer service, POS, New Business

Solution• Marketing and Lead Management System• Touch point unification - call center, branch, email, web, mail,

SMS, portal• Single system for managing Leads - New Acquisition Leads,

Cross-sell Leads• Models for Intelligent Cross-selling• Cross-sell campaign set-up

• Collections Management System (Business Conservation) • Single system across Agencies both internal and external

Benefits• Increased customer retention

• Improved inter-departmental teamwork• Categorization of customers • Availability of information on a single platform

• Business Conservation and New Business• Profit goes up 402 percent - from Rs.51.79 crore to Rs. 260.31

crore.• New business premium from traditional business at 45 percent -

up from 29 percent.

Benefits• Customer Service Management• TAT for customer service request has improved from 4.05

days to 2.74 days.• Adherence to SLA has increased to 95%.

• Better process control• Increased visibility through automated reports, escalations

leading to better control.• Process consolidation of pre-submission calling, cross sell

calling, new lead calling, campaign designing • Availability of information with regular updates on the

campaigns with offer statuses and customer information

SBI Life• Background:• SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif.,

wherein SBI owns 74 percent of the total capital and BNP Paribas Cardif the remaining 26%.

• CRM Highlights:• An in-house CRM system that serve as a complaint and lead management system• SBI's CRM system handles customer complaints efficiently through multiple channels• New CRM system has improved transparency, brought down complaint resolution time and

cuts across all customer touch points• Allows a single view of the customer and follows it within the hierarchy

• SBI Life can efficiently service any query/compliant because they have a consolidated view of all the past payments and history of customer interaction

• New system allowed to capture the initial interactions with potential customers. This helped in understanding customer behavior; what people are looking for.

Benefits• The central monitoring team helped in customer service

escalation hierarchy decision. • It allows a single view of the customer and follows it

within the hierarchy, and offers a summarized view• Improved transparency, brought down complaint

resolution time • First insurer in India to complaint with IRDA rules

effectively.

Reasons for CRM Failure• Customer – if clients are dissatisfied with execution

of CRM system• Data – Data stored should be complete. Any

inconsistency can lead to problems• CRM is implemented for enterprise & not customer• Cost – Cost incurred in for support, maintenance &

ongoing upgrade. As business grows this becomes quite expensive

• Security - A lot of security patches needs to get installed. If not done on time it can lead to problems.

Failure in CRM Implementation – MetLife Insurance

PROBLEMS• Happened when several databases across enterprise

were integrated• Data organized around product groups & not

customers• Data across systems was inconsistent• Wanted to increase automation & amount of data

available to customers• Goals of users was not explored• Voice response system was installed• Customer wish was not taken into consideration

Failure in CRM Implementation – MetLife Insurance

RESULTS• Resulted in customer attrition, wasted financial

resources, and lost opportunities• The customer was not willing to punch through a

bunch of numbers• Insurance agents complained of losing deals because

of poor service• Cost of the implementation project ran into seven

figures• Cost of implementation was less than the likely

losses suffered by MetLife due to loss of customer

Failure in CRM Implementation – Cigna

PROBLEMS• Cigna HealthCare was operating with IT systems that

were nearly two decades old• It had separate units for enrolment, processing

medical claims and verifying customer eligibility• The customer information pertaining to medical

claims was spread across 15 distinct IT systems• The claims and eligibility information systems were

not inter-connected• Customer service representatives found it difficult to

process the 120 million claims per year that Cigna HealthCare received

Failure in CRM Implementation – Cigna

RESULTS

• Develop an integrated system• This system would• Generate one bill across products and divisions• Process the medical claims of customers• Provide case histories of all the customers to the

customer service representatives• Facilitate exchange of information with customers

Failure in CRM Implementation – Cigna Where the system failed

• Failure in integration of huge database• Implementation of system without optimally checking it • The front-end applications, used by service representatives could

not retrieve data from the back-end systems easily• The back-end database was not filtered and sorted out• Customers also faced difficulties in obtaining information relating

to health coverage plans• Cigna was unable to confirm the registration to customers for

many days• Cigna issued identity cards with incorrect numbers and services

were provided incorrectly• Cigna lost .89 million customers & $ 398 million in revenue

CHALLENGES• Effectively collaborate with network of agents and

intermediaries to get better visibility of sales processes, reduce cycle times and prevent revenue leaks?

• How to provide valid, up-to-date intermediary-wise performance data to help relationship managers drive revenues?

• How to influence corporate buying decisions, while working to forward relationship width?

• How to ensure optimal service quality to customers &intermediaries, across a multi-source eco-system?

CHALLENGES• How to evolve a complete 360 view of customers along

with their policy holdings, risk profile, premium payments, claims history, to judge true value of relationship?

• How to tap complete household/ account potential to offer personalized products as per requirement and propensity, using cross-sell/ up-sell techniques?

• How to provide proactive real-time insights into processes for actions, with intelligent reports &dashboards?

• How to comply with ever changing insurance regulations?

Conclusion• Insurance sector in India is a booming sector and has seen a

tremendous growth in the past few years.• Affirmative view of customers about owning an insurance policy

which proved that Insurance is the need of the day.• Insurance companies have started developing specific CRM

initiatives to retain their customers.• Policy holders also acknowledge the presence of such CRM

initiatives.• Though many initiatives have been taken up by companies, still

CRM in the Insurance sector is at a nascent stage• CRM solutions can go a long way in helping companies implement

effective measures to manage risks. • CRM solutions can help the sales team make clear decisions

Thank You!!!!!!!