Customer Experience, Analytics and Cloud Will Drive Insurance Industry Growth — I&T Summit Panel

At a time when even retention is challenging, what strategies should insurers employ to differentiate themselves and drive growth? Dependin on their strengths, should they look to product innovation, service propositions, channel diversification, demographic or other market specialization, etc. And what are the technologies needed to support those strategies? We asked these questions of a panel of 2010 Insurance & Technology Elite 8 Award winners and industry vendors.

Graeme Boddy, CIO of Builders Mutual Insurance (Raliegh, N.C.) said that P&C insurers have an opportunity to differentiate themselves through the provision of risk management servers. : it will be on manageing risk. “Things such as offering OSHA training, use of harnesses to prevent injuries, etc.,” Boddy said. “These are services that insurers could provide for free.”

Growth will be tied to delivery of a superior customer service, according to Larry Hogan, Thunderhead.com’s global Director of Industry Marketing for Insurance. “It’s not just about the end-customer but the agent and broker as well,” Hogan commented. “That’s where growth will be determined.

Mark Strickland of TCS seconded Hogan’s sentiment: “It really is about customer experience from both an end-customer and distribution point of view,” he remarked. “How do you communicate with customer the way they want to be communicated with?” It’s also about how insurers attract talent in a changing world, insisted Mark Clark, senior VP and CIO of Jackson National Life (Lansing, Mich.). “We are in a time similar to the Industrial Revolution,” Clark said. “In order to take advantage of world where everybody is interconnected, we’ll need very innovative people.”

[For news from I&T's Executive Summit, see on Insurers Across Lines of Business Focus on Continuity Post-Sandy .]

Attracting such people will be a challenge for the insurance industry, but carriers can work with universities and evangelize for the insurance IT career. The insurance industry may not be considered glamorous by many students, Clark acknowledged. “However, when you contrast that that with the fact that we have more technology in our industry than anybody else, we need to emphasize that and attract people,” he added.

Another historic shift to be considered is cultural diversification within the United States, commented Greg Clancy, senior VP and CIO, Indiana Farm Bureau Insurance (Indianapolis). “Even in Indiana we have huge inflow of people from other countries, cultures — I’m in a multicultural family myself,” Clancy noted. “People from different cultures want different products and different kinds of approaches, and we need to match the agent force to those appetites,” he said. “In terms of retention of our current customer base, we’re doing things like consolidated billing, allowing people to determine how the company bills to them, e.g., electronic, paper, once a month or year — so customizing service offerings to meet customer needs.”

Sanjay Mohan, senior VP, Polaris Financial Technology (Chennai, India) said that insurers should keep a “laser focus” on managing customer lifecycle. “Make sure you understand what the next-gen customer is about,” he advised. “Analytics will play a very strong role, as will understanding social media and mobility. Insurers will also need to simplify underlying infrastructure and architecture.”

It’s true that there’s no shortage of competition in any aspect of the insurance industry, and yet there are two surprising things to notice, asserted Bruce Brossard, VP of business development, Insurity (Hartford). “We have more data than just about any industry, so use of data and analytics for customer experience represents a significant opportunity,” he commented. Broussard added, “I’m amazed sometimes at the difference between what some companies believe their differentiation is and what an objective consideration of that company would actually show it to be. Companies need to match technologies and services to their genuine strengths.”

Stephen Applebaum, a Chicago-based analyst with Aite Group offered a contrarian point of view, suggesting that growth itself may not be the appropriate objective. “I would focus on profitability, improving the quality of the customer database and investing where paybacks are significant,” he said.

Products are becoming commoditized, so insurers have to focus on having a culture of innovation within their organizations, recommended Saket Bhatnagar, VP of sales for HCL AXON. “Insurers need to become more of a retail kind of company where they are much closer to customer and following the customer relationship very closely,” he counseled. “From a technology perspective, cloud and analytics start to play a very important role, and these are the technologies we should bet on.”

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio