News Article
Mon 28 Apr 2008
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Insurers' focus on customer service fuels improved CRM
Heightened competition along with more informed and demanding consumers is causing insurers worldwide to rethink their strategy
Insurers can no longer afford to provide poor customer service, nor can they continue failing to understand each policyholder, says a new report by independent market analyst Datamonitor.
The report, "CRM In Global Insurance", concludes that in order to remain competitive and to maintain profitability, life and non-life insurers globally must expand beyond their core competency of risk management and focus on customer management.
By focusing on the customer, Datamonitor points out insurers will be able to identify and grow their most profitable ones, while minimizing the resources spent on the less profitable customers. As a result of this one strategy, insurers will reduce customer acquisition costs and decrease customer churn, resulting in improved margins. Furthermore, insurers can enjoy better returns on marketing campaigns by closing the loop between the sales and marketing departments.
"Without question, every insurer, no matter its size or region of operation, needs to adopt a CRM strategy in order to remain competitive today, and build for the tomorrow," says Jonathan Steiman, a Financial Services Technology Analyst with Datamonitor and the report’s author.
Datamonitor projects CRM software licenses and Software as a Service (SaaS) subscriptions to grow from a world-wide total in 2007 of $284 million to $440 million by 2012, representing an average annual increase of 9%. Non-life, or property & casualty, insurers spent and will continue to spend more than life insurers, though the split is fairly even. The fastest growing region is tipped to be Central & Eastern Europe. The more mature markets of North America and Western Europe are expected to expand at rates lower than the overall global market.
The report, "CRM In Global Insurance", concludes that in order to remain competitive and to maintain profitability, life and non-life insurers globally must expand beyond their core competency of risk management and focus on customer management.
By focusing on the customer, Datamonitor points out insurers will be able to identify and grow their most profitable ones, while minimizing the resources spent on the less profitable customers. As a result of this one strategy, insurers will reduce customer acquisition costs and decrease customer churn, resulting in improved margins. Furthermore, insurers can enjoy better returns on marketing campaigns by closing the loop between the sales and marketing departments.
"Without question, every insurer, no matter its size or region of operation, needs to adopt a CRM strategy in order to remain competitive today, and build for the tomorrow," says Jonathan Steiman, a Financial Services Technology Analyst with Datamonitor and the report’s author.
Datamonitor projects CRM software licenses and Software as a Service (SaaS) subscriptions to grow from a world-wide total in 2007 of $284 million to $440 million by 2012, representing an average annual increase of 9%. Non-life, or property & casualty, insurers spent and will continue to spend more than life insurers, though the split is fairly even. The fastest growing region is tipped to be Central & Eastern Europe. The more mature markets of North America and Western Europe are expected to expand at rates lower than the overall global market.
* Source: Customer Strategy - www.customer-strategy.co.uk