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Insurance & Technology: The Blog« April 2008 | Main | June 2008 » May 27, 2008Is Customer Service Strategic?Of course it is! At least that's the answer you'll get if you ask a C-level company officer. If you ask those closer to the delivery of customer service they're likely to say, "...not so much." That, at any rate, is the basic message of a survey commissioned by customer service management and software provider Genesys (Daly City, Calif.) study and conducted by Equation Research entitled "The Executive Disconnect: The Strategic Alignment of Customer Service." Polling executives and customer service professionals in 927 companies in 47 countries, the survey found that while C-level execs and front line customer service people agree about the importance of service to the brand, their opinions diverge notably as one moves into the details that contrast objectives and actual achievements. To provide a characteristic example, 41 percent of C-level execs believe their companies measure the experience of self-service by quality rather than cost savings while only 35 percent of customer service professionals do. It's not a huge difference, but its significance is magnified by certain considerations: first, the question should be empirically verifiable: what counts for a quality metric and what counts for an efficiency metric should be identifiable. Second, the rosier picture is held by the person closer to theory than practice. Finally, that pattern of bias is consistently visible across several questions. If customer service is indeed important for the success of a brand - and this must be the case to some extent, for most brands - then the survey is valuable for its revelation of the disjunction between belief and reality when it comes to how companies are fulfilling their service commitments. The survey is also valuable as a reminder that all projects that filter down from visionary heights to the front lines are likely to look somewhat different depending on which end of the continuum one has as a vantage point. There will be distortion that ensues from the Platonic nature of vision in contrast to execution, and there will be distortion caused by a lack of feedback from back to front that enables correction both of plans and interpretations of their effects. Posted by Anthony O'Donnell at 03:36 PM | Comments May 22, 2008AIG Wins With Reds in MoscowBranding is not an IT topic, exactly, but brand considerations bleed into the uses of e-commerce and communications technology. In this case, the main channel was satellite television, but images of AIG’s logo could be seen in a variety of media, including print and online, throughout the world owing to the carrier’s sponsorship of Manchester United’s victory over Chelsea in the UEFA Champions League final yesterday in Moscow. Man United, whose nickname is “the Red Devils,” or “Reds,” for short, also won the English Premier League title for the 2007-08 season. AIG has participated in the recent wave of insurance television advertising exemplified by Nationwide’s “Life Comes at you Fast,” campaign and AFLAC’s “There’s Only One” animal comparisons. Last night I saw AIG’s “Can’t Sleep” ad, which features a little boy walking into his parents’ room. His mother asks, “Did you have a nightmare?” The child answers, No, I’m worried about this family’s financial future. Does your retirement plan provide predictability of income and protection against market risk? Do you have good supplemental health insurance? What about estate planning? Car insurance? Dents are easy to fix but liability’s the nightmare! The father replies with tiresome predictability, “Buddy, we’re with AIG!” Perhaps some people find the hyper-precocious child trope amusing. I find it irritating, both for its contrivance and its tin-eared caricature of intelligent childhood. Few things are as charming as truly articulate children, and there is something proportionately distasteful about the spectacle of a child obviously parroting adult speech. To make matters worse, the child actor in the AIG ad assumes a posture as unrealistic as his lines, making him appear as if he were suspended from marionette wires. At least the ad is brief, and it's not as bad as those grotesque ads that project images of adult mouths speaking full-grown inanities onto the faces of infants. The AIG kid is cute in an idiosyncratic way and obviously very gifted. I can only wish that he’s allowed to be himself in future gigs. It may be that annoying ads are effective as pleasing ones. However, I can’t help thinking there’s some advantage in the reassuring presence of Dennis Haysbert in the Allstate ads and the Cockney charm of GEICO’s gecko. Similarly, one has to believe that AIG benefits enormously not just from the frequency of exposure that comes with a brand such as Man U, but also, as in the case of Accenture’s Tiger Woods ads, the association with a winner. Posted by Anthony O'Donnell at 01:44 PM | Comments May 20, 2008Google Launches Its Own PHROn Monday, Google announced that it has started to offer online personal health records to the public. The Google PHR, which provides users with tools to collect manage and store their personal health information online, was previously only available to patients at the Cleveland Clinic as part of a pilot program.
InformationWeek also says that third-party alliances -- such as those with pharmacy chains, testing labs and prescription drug management companies -- will be key to Google's initiative. However, it's my opinion that biggest outside player to the ultimate success of Google's PHR or similar programs such as one launched by Microsoft last fall will be the insurance industry. Certainly, PHRs can help improve patients' quality of health care by providing physicians and other healthcare providers with a more holistic clinical record. Still, PHRs are only as valuable as the information they contain. What if a patient forgets to add a new drug they're taking to their PHR? What if they aren't vigilant enough in updating their PHR with their most recent medical history? In some cases, PHR integrations with physician or third-party data feeds can help catch what falls through the cracks. Health insurers, though, with their claims data are best equipped to fill-in those gaps. Just about any patient is going to receive healthcare from multiple sources in a given year or over the course of a few years. What will remain relatively consistent will be the health insurer handling all those disparate claims. It seems to me that the best way to keep PHRs up-to-date (and thus, actually useful) isn't to rely on patients to populate the records with data. It's to create a central depository for a patients medical data by integrating with disparate data sources . Then, allow the patient to control it. Let them choose how to use that information and which health care providers they want to have access to it. In that scenario, claims data would be key. If Google or Microsoft are looking to improve the usefulness of their respective online health management efforts, they'd be well served to partner with as many insurers as possible. Of course, then the questions becomes: will insurers, many of which have PHR offerings of their own, be willing to cooperate? Posted by Nathan Conz at 05:36 PM | Comments ACORD/LOMA MusingsThis year's ACORD/LOMA Systems Forum was like other years for me in that it meant a great many back-to-back appointments and some fairly intense socializing with industry friends whom I seldom get to see otherwise. It was also similar in the mixed reviews of the show from the standpoint of the vendors. Courtesy no doubt plays a role in these matters, but I heard very positive remarks about the show both on and off the floor until the very end. Only then did reports come to me, usually second hand, that the traffic was perhaps not so great. The contrast of the negative comments with the positive was striking, and yet it was familiar. When is there ever enough traffic. Of course, from the perspective of a journalist meeting vendors and analysts, the show can't fail to be a success, and so it was for me and my colleagues at I&T. However, I also had an outstanding experience in terms of the number and rank of insurance executives I happened to see. Several were old friends but some were new people I was very happy to have the chance to meet. The tone of the show was welcome too, considering that the economic downturn might have cast a pall over the proceedings but didn't. Finally, I had the chance to do some video podcasts with some very smart and personally delightful people, including Linda Dodson of Chubb, BA Scott of New York Life, Frank Neugebauer of ACORD and Deb Smallwood of Smallwood Maike & Associates. Since the ACORD/LOMA Insurance Systems Forum ran right through midweek this year, it was impossible to cover the show's announcements in the normal way through I&T's weekly newsletter. That being the case, we saved some announcements for the May 21 edition and will no doubt use others for the next print issue we produce. Posted by Anthony O'Donnell at 04:22 PM | Comments May 13, 2008Health Insurance Consumer Demand Could Shift Towards Mobile FunctionalityThere has been no shortage of health insurers who have made news over the past few years by embracing a more customer-centric business strategy and, as a result, rolling out several customer-facing online tools. The next step though, I believe, center around how insurers make those tools available to members (and, in some instance, potential members) on mobile devices. It’s something that I’ll write about in an upcoming Update story about a recent project at WellPoint. I’d argue that one of the primary reasons that customers began demanding or expecting better online functionality from their insurers was because broadband internet access, over the past few years, has become much more prevalent in the homes of average Americans. Fewer consumers were looking for transparency tools and online provider directories when their 56k dial-up modems grinded web surfing to a snail’s pace. With that sentiment in mind, perhaps a similar transformation is on verge of taking place on mobile devices. While web-enabled mobile phones, BlackBerries, iPhones and the like have already reached a critical mass, some recent developments could lead to a vastly improved overall mobile experience and, as a results, perhaps wider acceptance of mobile applications by the public at large.
I don’t know enough about wireless data networks to understand the full impact of this agreement, but I do know that improved data speeds will undoubtedly lead to an uptick in the number of organizations that focus more effort on mobile, customer-facing applications. Right now, cell phones and other devices have certainly reached a critical mass, but web-based applications build for those devices are lagging just a bit behind. As the times article suggests, “The wireless network of the future is expected to be fast enough — rivaling speeds that cable customers have in their homes today — to allow delivery not just of text and simple Web pages, but of video and advertising.” If and when that occurs, consumers will start expecting insurers to deliver mobile functionality in the same way that they are just now starting to deliver web functionality. Posted by Nathan Conz at 04:41 PM | Comments Big Vendors Affirm Insurance OpportunityAs if to validate last week's Editor's Note, major horizontal vendors have demonstrated its introductory hypothesis, perhaps best summarized by the words of the notorious Willy Sutton. When asked why he robbed banks, Sutton famously replied, “That’s where the money is.” This week two major technology players made announcements about their intentions to beef up their insurance vertical presence with the acquisition of important insurance industry technology vendors. Yesterday HP announced it would acquire EDS, and Oracle said it is buying up-and-coming, new-technology policy management software vendor AdminServer. Taken together with Versata’s announcement last week that it would acquire Clear Technology, this latest round of M&A is probably the most significant spate of insurance technology vendor consolidation since 2006, which featured deals such as IBM/FileNet and ChoicePoint’s acquisition of ePolicy and Insuratec. These deals demonstrate recognition on the part of large horizontal players that they believe there is still great potential for sales in the insurance industry, says Craig Weber, Celent senior vice president and insurance practice leader. “For big players such as Oracle and HP to make a commitment in the insurance industry shows that they are willing to verticalize their offering and that they believe that there’s a long-term play in the industry.” In that respect, while their methods may differ from Mr. Sutton’s, they share his insight on the opportunities presented by the financial services industry, and in this case, the insurance vertical in particular. Posted by Anthony O'Donnell at 11:57 AM | Comments May 06, 2008The Test of Relevance: Ed Zore, Northwestern Mutual
Posted by Anthony O'Donnell at 01:27 AM | Comments The Virtues of Virtual: Ron Boyd, Midwest Family Mutual
Posted by Anthony O'Donnell at 01:24 AM | Comments Eyeing the Competition: Thomas C. Godlasky, Aviva North America
Posted by Nathan Conz at 01:19 AM | Comments Fast Company: Stephen Sills, Darwin Professional Underwriters
Posted by Kathy Burger at 01:17 AM | Comments The Utilitarian: John Leonard, MEMIC
Posted by Nathan Conz at 01:08 AM | Comments May 05, 2008Real Opportunity or Hype?: Video Games and InsuranceAs a member of the I&T editorial team, I’m constantly inundated with new product announcements, story pitches and press releases -- with each e-mail or phone call assuring me that the product or concept in question is revolutionary, industry-changing or both. As a result, a big part of our job here at the magazine is to cut through the hype and find out what really works -- not in theory, but in practice. Cutting through the hype is especially true when it comes to Web 2.0-type technologies. Can social networking initiatives, blogs, or wikis really benefit an insurance company or are they just buzz words that are fun to throw around at business meetings? Even with that necessary skepticism in mind, I couldn’t help but be intrigued by a new feature in Grand Theft Auto IV: Liberty City , the controversial and obscenely popular video game that hit store shelves at the end of April. The game’s developer, Rockstar Games, has partnered with Amazon to market GTA IV’s in-game music tracks. [If you need some background, the Grand Theft Auto series of video games are set in fairly well-developed, 3D, virtual cities. Gamers are free to accept missions or simply explore the game’s environment on their own. A gamer can quite literally hop in (or steal) a car, flip on the radio and cruise around aimlessly if they so desire.] from Yahoo: So what are the insurance industry implications of this innovative new distribution model? Right now, there are none. It’s one thing to market rock and hip-hop music to young adult gamers. It’s another to try and sell them insurance products. Still, many studies suggest that the average gamer is older than conventional wisdom dictates and now that the latest generation of video game consoles practically require Internet connectivity, it wouldn’t be too big a jump to link an in-game billboard (maybe even one advertising, let’s say, auto insurance) to an actual Web site. I’m not saying that insurers need to immediately dedicate valuable time and resources to marketing opportunities that may exist within popular video games. It’d be foolish to do so. On the other hand though -- given the increasing popularity of the video game medium -- it’d be just as foolish to ignore them completely. I guess the key is to separate what’s viable and what’s just hype. Posted by Nathan Conz at 05:27 PM | Comments Why Tech Savvy Matters to CEOs – And To Those Who Judge ThemEvery once in a while, when acquaintances jocularly question the economics of a trade publication dedicated to the subject of insurance IT, I ask them to guess how much the largest insurance carriers spend annually on IT. My interlocutors typically answer, "I dunno; maybe $10 million?" I laugh in a way reminiscent of the characters responding to Dr. Evil's pathetic ransom demand in the first Austin Powers film and say, "Try again." They give their second answer, sure that this time they vastly overshoot the mark: "OK, one hundred million!" I laugh some more. I bring this up not so much to reflect on what insurance CIOs spend as what CEOs entrust them to spend. Given that insurers typically spend 2.5 percent to 3.5 percent of direct written premium on IT, it seems unlikely that a respectable understanding of the potential of technology for business success should be a rare commodity among insurance CEOs. Every time we embark on Insurance & Technology's "Tech-Savvy CEOs" issue, someone is sure to remark: "Isn't that an oxymoron!" And I am always tempted to respond, "Good one! Haven't heard that before!" However, there's enough anecdotal evidence and appreciation of IT's not-too-distant historical role of order-taker to forgive a wag suffering from painful memories. Memories they must be, however. Technology has revolutionized business, period. And the insurance industry, whatever its shortcomings, is no exception. It may be that some few technophobic stragglers exists, perhaps in smaller companies, or surrounded by capable executives who can protect them from themselves. But success is increasingly tied to astute commitment to technology investment, and not just for cost-control. Vendors, consultants and analysts may have occasionally exaggerated the importance of tech savvy at the higher tiers of management in the past, but their exaggeration had the saving grace of being prophetic. Today, equity analysts who follow CEOs performance, and boards who hire and fire CEOs, act under the assumption that a CEO ignorant of the potential of technology is not likely to be a good CEO. Along with other observations and commentary, you can read about the increasing expectations boards and equity analysts have of CEOs in my introduction to I&T's June 2008 Tech-Savvy CEO issue, due to be circulated electronically within the next few days. The issue will also contain written profiles of the five CEOs recognized this year, along with other special content and regular I&T features. In the meantime, we decided to take advantage of our weekly newsletter to share with our audience podcasts featuring conversations between the this year's Tech-Savvy CEOs and the editors of I&T. Posted by Anthony O'Donnell at 03:20 PM | Comments
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WHITEPAPER Insurance 2020: Now what? In todayŐs competitive insurance industry, the challenges are many and there is much uncertainty.To survive and thrive, insurers must seek new models and strategic success that enable innovation and increase profitability. |
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