In 2010, according to the data of the
United States Census Bureau, the GDP of finance and insurance industry
accounted for $1,235 billion dollars, roughly 8.42% of the overall GDP of the
country. Meanwhile, insurance industry plays several important roles for the
society: (1) it functions as a financial intermediate institution, (2) it helps
individuals and organizations to manage their risks, (3) it is the biggest
investor of any other industry, and (4) it provides indemnity against loss,
which actively secures the development of the economy. Recognizing the
importance of the insurance industry, the authors attempted to examine the
customer relationship management (CRM) strategies used by insurance firms. Specifically,
they conducted this research for three purposes: (1) to understand technological
applications in insurance industry, (2) to know how the insurance firms utilize
CRM to analyze the customer potential, and (3) to find out a more sufficient
approach to input customers’ data to the CRM systems.
The research was conducted under
semi-structured, in-depth interviews. The authors interviewed 30 individuals
from three Indian insurance firms. These 30 individuals ranged from first-line
employees to executives. The four insurance firms were: ICICI Prudential LifeInsurance, Aviva India, Birla Sun Life, and HDFC Standard Life. The authors
then concluded the findings as follows:
1. Most of the firms used Talisma
software as their CRM system but some developed their own systems.
2. The CRM was used to record customers’
profiles, transaction details, and reminder services. These were all fundamental
functions of the CRM.
3.
Lack of updating customers’
data.
4.
The CRM also provided customers’
preferences in activities and risks accompanied.
5.
The employees’ perception of
CRM did not match with the current systems.
6.
The employees had positive
responses to the current CRM.
7.
The firms desired to employ CRM
as a catalyst between themselves and the channel partners.
8.
The employees were aware that
service quality was necessary for differentiation.
This study provides some valuable understanding
of the CRM applied in the insurance industry for managers of insurance firms. Based on the
research, we may know that to cope with the stiff competition in insurance, a
better quality of service is needed. And CRM is a useful tool for insurers to
realize everything about their customers. A major work for insurers is to
update their CRM system constantly to reflect the reality. The CRM should not
only provide customers’ names, addresses, phone numbers, or policies hold,
these are all basic data; the system should provide more, such as customers’
financial situations and life plans. The more comprehensive an insurer can know
its customers’ potential, the better a firm can serve its customers, and the
more it can differentiate itself from others.
It is interesting to see that while academics feel CRM is quite valuable for increasing profits through keeping existing customers and attracting new one this isn't always the case in practice. The findings included lack of updating customers' data and perceptions of CRM didn't match with current systems. If this is as important to the firm's bottom line as research suggests wouldn't firms push CRM and ensure it is updated and employees understand the importance.
ReplyDeleteYes, it is quite surprised that CRM couldn't update customers' date in India insurance industry since India has been famous for its IT industry for recent two decades. I guess the problems may be the inefficient management and the unorganized employee education.
DeleteAlong with banking field, insurance field interacts directly to customers at most. Therefore, it is necessary to improve the quality for customer service everyday. Fortunately, the findings in this research showed that the employee realized the role of CRM to make their services different from the others in competiton. However, according to this research, CRM in insurance field still need complementing to assist a company overcome its competition in a challenging market.
ReplyDelete1. Indeed, in US and some other developed countries, it is quite common that banks, insurance firms, and security brokers work together as a financial holding company (FHC) to integrate their information and resources so as to better serve the customers. The emerging of FHCs well demonstrates the application of CRM. However, another issue rises: are we creating a financial huge monster?
Delete2. The conclusion of the article was based on Indian insurance firms. CRM may not be well adopted in India, but this is not the case for other countries, especially for developed countries.
CRM is more than just technology. To be successful, a company should look at CRM as an opportunity to improve relations with customers.
ReplyDelete