Insurers' Customer Advocates Glean Insights from Data

With customer experience paramount, carriers are installing business units devoted to providing data-driven insights into current and prospective policyholders.

With the insurance industry fully enamored with customer experience, more carriers are creating positions within their enterprises devoted entirely to the concept. These include Lincoln Financial (Radnor, Pa.) and Allianz Life (Minneapolis), who have both done so since the beginning of the year.

Lincoln Financial went beyond the single executive by creating a Consumer Insights Group within its Insurance Solutions/Retirement Solutions (IS/RS) division. Emily Pachuta, who leads the group, tells Insurance & Technology that her charge is to turn the massive amount of customer data the company collects into actionable insights.

"We're really looking at behaviors and decision-making drivers of the end consumer," Pachuta says. "We have a very varied customer, from older, quite affluent people to younger people just starting out in their job."

Pachuta says her group will "rely on data analytics, quantitative and qualitative analytics" to find out what attracts consumers to Lincoln's products.

"Many companies look why people don't buy insurance or contribute to their retirement plans, but we want to understand who's working with us and why," she explains. "It will show us market expansion opportunities and we'll have a much better understanding of the levers we can pull to consider insurance and consider Lincoln."

Lincoln appointed a VP of user experience in February 2011, Anand Rao, with whom Pachuta says her group will work closely not just from the end-user standpoint, but also on social media measurement. "It's two sides of the same coin," she says. "You have to be part of the conversation and hopefully shape it because consumers are making decisions there."

Forrester analyst Paul Hagen says the explosion in discussions of companies online is the major reason why companies are adding chief customer officers or equivalent positions.

"Twenty-four hours a day, seven days a week — in a home, in a car, in the shopping mall — customers have constant ability to think of something, ask a question, go online, interact with the company they're doing business with," Hagen says. "People trust that word of mouth more than the advertising that they're seeing."

Hagen adds that he's hearing from "as many or more" insurance companies as people from other industries in his discussions with companies about how to install a chief customer officer.

"The person at the very basic level needs to be the chief advocate for the customer," Hagen says. "Ultimately, they're trying to embed user-centered or customer-centered thinking into product development, changing from just looking at business processes to looking at customer journeys."

Executives in customer-centric capacities have an opportunity to be "a great ally" with the CIO, he notes, because both positions require a view of processes across the company. In fact, one in 10 chief customer officers or equivalent positions at companies Hagen studied for a recent report, The Chief Customer Officer (CCO), 2012, came from IT.

"They both need to engage a lot of other people," he explains. "Companies' tech systems are one of these big albatross kind of things where you can do a lot of process improvement pieces."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio