Conning & Company study finds cultural and business-model hurdles often challenge CRM effectiveness in personal lines insurance
(Hartford, CT) May 2, 2002 – Customer Relationship Management (CRM) software has been touted by IT vendors as the genie in the bottle, granting insurers’ wish to significantly improve business performance. But the costs – up to $100 million – and failure rates are high. Early CRM results for property-casualty insurers have been less than magical. After analyzing the results of some P-C insurers’ CRM efforts, a new study from Conning & Company has determined three things: one size does not fit all, CRM software solves nothing unless the insurer’s culture and business model are supportive, and CRM implementation must include thorough employee education.
The Conning study, “CRM in Personal Lines Insurance,” found that insurers were split on the effectiveness and usefulness of CRM technology. Most of the challenges to CRM implementation were not technology-related. Unfortunately, some PC insurers view CRM as nothing more than a technology effort rather than a fundamental strategy that helps establish and build customer relationships.
“When CRM fails, most of the time it’s not because of the technology; rather it’s because of corporate culture, a failure to identify customers’ needs up front, and lack of a rigorous organizational assessment,” said Clarence Smith, Assistant Vice President of Conning & Company and author of the study. “Companies must not only effectively implement the right CRM package, but the employees must also embrace it and be trained to use it effectively. Some PC insurers have simply not been able to meet all of these challenges. CRM requires a customer-centric culture and should also be consistent with an insurer’s business model.”
In addition, Conning found some PC insurers had invested only in “operational” CRM and not in “analytical” CRM, leaving service representatives and field personnel collecting a great deal of data without analyzing the data to identify ways to build stronger customer relationships.
“With an incomplete or unwieldy CRM package, customer service reps do not have at their fingertips all of the data that aids in direct interaction with the customer,” said Smith. “Analytical software is available but many insurers have not purchased it yet because of budgetary restrictions. Conning urges insurers to look before they leap into CRM.”
The Conning study, “CRM in Personal Lines Insurance” is available from Conning & Company for $850.00 by calling toll free (888) 707-1177 or (860) 520-1521. A complete listing of all Conning Strategic Studies can also be found by visiting the company’s Web site at www.conning.com.
Conning is one of the largest asset managers specializing in insurance company investments in the United States, a leading source of private equity capital to financial services companies and a nationally respected provider of research publications on the insurance industry. Conning & Company is located at CityPlace II, 185 Asylum Street, Hartford, CT 06103.Tags: Conning, Customer Relationship Management (CRM), personal lines