Customer Relationship Management in Insurance sector

Introduction
Our insurance CRM helps general & life insurance companies enhance customer
satisfaction. CRM next boosts revenues by streamlining processes, improving
intermediary management and providing actionable intelligence at front-ends on a
single technology platform .CRM initiatives at insurance companies often have annexed
visions due to the complexities involved in creating a single repository of actionable
data. These initiatives become departmental in nature, point solutions that quickly
become part of the problem.
CRM in Insurance An Introduction, presents the insurance scenario and focuses
on the opportunities this lucrative business offers both to the insurers and the customers.
It also illustrates how insurance companies gear up to the challenges thrown by
customers and the competitive environment itself by embracing CRM. Divided

into

two sections Global and Indian Perspectives, the book deals with the complexity of
the insurer-insured relationships. It etch uses insurance professionals and students alike.

Background
Insurance products are becoming more commoditized.
Customers are being influenced by multiple channels to make their buying
decisions.
Advertising efforts are being countered by comparison portals, insurance advisors
and corporate alignments.

 A large share of business is driven through intermediaries where information

challenges exist for effective management without the implementation of CRM
for insurance.
Companies continue to face stiff revenue targets spread across too many
stakeholders. Stakeholders struggle to deal with too many processes, systems and
geographies.
Challenges
Effectively collaborate with network of agents and intermediaries to get better
visibility of sales processes, reduce cycle times and prevent revenue leaks?
How to provide valid, up-to-date intermediary-wise performance data to help
relationship managers drive revenues?
How to influence corporate buying decisions, while working to forward
relationship width?
How to ensure optimal service quality to customers & intermediaries, across a
multi-source eco-system?
How to evolve a complete 360 view of customers along with their policy
holdings, risk profile, premium payments, claims history, to judge true value of
relationship?
How to tap complete household/ account potential to offer personalized products
as per requirement and propensity, using cross-sell/ up-sell techniques?
changing insurance regulations? How to provide proactive real-time insights into
processes for actions, with intelligent reports & dashboards?
How to comply with ever.

4 Key Reasons for Implementing CRM in Insurance

Insurance is a volatile sector. Reputations can be damaged and restored within a span of
months and government imposed regulations can make margins appear and disappear
almost magically. The sector however is one of the most dynamic in the Indian business
landscape and the keenness of international players to invest in it bears testimony to the
massive potential it holds. In the domestic space too, there have been some massive
transformations, LIC faced competition for the first time in decades in the life insurance
segment with the pie in the non-life and health insurance segments being shared equally.
These developments in the sector have made it even more important for companies to be
abreast of the latest tools and solutions so that they can be a part of the race where some
of the best names in the international market have already made their presence felt. With
the lobbying for removal of the FDI cap of 26% in insurance getting more intense by the
day, it is clear that the sector is on an upward incline for a major boom. Streamlining
business operations and managing customer data therefore have assumed more
importance than ever - the role of CRM in insurance sector is now crucial.
The winning factor
While the banking sectors business does not completely depend on the customer
database, the insurance sector cannot exist without a solid set of databases that include
existing customers as well as prospective ones. Procuring these databases is also a major
challenge in this sector and therefore optimum utilization and proper management of the
data could well be the winning or losing factor for a player. In an industry where the
competition is so intense, making customer related data accessible to the sales,
management and customer service team in the most efficient, cost-effective and timely
manner is a challenge for any CRM solution provider. . Ensuring that the firm is in line
with the IRDA regulations and there is ample scope for the launch of a new marketing
3

strategy is no longer a decision made randomly by the board, but a logical deduction
from the CRM data that is on the table today
Integration and segregation:
Two of the biggest functions of CRM in the present market scenario are therefore
integration and segregation. Integration of the data from across the various departments
and technical, meticulous and efficient segregation of this data related to claims, policy
holders, expired/ new policies, corporate clients, prospective clients, third party policy
sellers and agents among others is thus essential. A company choosing to upgrade their
existing CRM or implementing a new one to keep up with competition should therefore
look for high levels of customization when it comes to these two processes.
Customer grievances
No matter how good an enterprises CRM solution, sales, marketing and customer
service department, grievances will remain. While 100% customer satisfaction and
claim settlement is an illusion, companies have no choice but to strive for it.
Some of the common complaints against insurance companies remain delays in claim
settlements, inefficient customer care officers, cumbersome paperwork and opaque
claims processing routines. Insurance players in the health and life insurance space have
to be doubly careful when it comes to handling customers, sentiments can run high and
the media can be quick to spread disrepute. Single point of contact for most departments
related to customers, easier navigation, interactive online and telephonic presence with
friendlier call center executives are some of the solutions that can be implemented apart
from high-end CRM solutions.

Changing landscape
The customer today has more money and knowledge than ever before. Impressing them
with typical CRM tools like seasonal and birthday greetings is no longer effective. The
need of the hour is comprehensive KYC packages where personalized and customized
services are provided. With the rapid expansion of the customer base, risk management
has also emerged as a major challenge and CRM solutions can go a long way in helping
companies implement effective measures to manage risks. Solid portfolio management
used to be a manual process even a few years ago as there was a great deal of analysis
and inference involved. Today, however, CRM solutions have the power to replace the
analyst and come up with inferences that can help the sales team make clear decisions..
Solution providers for CRM in insurance sector are likely to look at the potential of this
market and therefore come up with better-customized, efficient, real-time and costeffective solutions for the insurance sector with special features for Big Data, social
CRM, email syndication, two-way SMS and more.

4 CRM Strategies Spell Insurance Industry Success

Risk is a relative concept .When it comes to innovation, the insurance industry often
gets a bum rap: slow to change, reactionary. One Dream force 2011 session, The Next
Generation of Insurance, was even subtitled Rethinking a Laggard Industry.
Now, the insurance industry may be slow, but Id never label it as lagging. Relatively
speaking, the industry has been fairly aggressive in introducing new products and
services to meet its customers needs. The insurance industry is also built on the notion
that its managing risk. By avoiding risky bets, insurers have historically made money,
because theyve been able to invest the money from customers premiums, and pay out
less than they take in, thus generating profits. With a sure bet, why should the industry
risk changing too quickly?
How CRM Helps Lower Costs And Increase Profits
1. Contact center optimization:
For insurance companies, their first customer-service goal is to ensure that all inbound
calls get solved by the member services agent who first picks up the phone. Of course,
insurers have been focusing on the contact center for some time. But theyre coming
back, since more business is now happening online. In addition, there continues to be a
clear relationship between technology investments and business returns, as expressed by
the number of calls per hour that agents can handle.
2. Sales force transformation:
6

Insurance companies often change and adapt their products to suit the needs of
evolving markets, and to capitalize on new opportunities. For example, the life
insurance industry has become expert at handling the complicated payouts that can be
required after one of their policyholders dies. But to keep retooling their products and
services, insurers typically require more flexible sales automation tools, not least to
enable salespeople to remain up to date on all of the latest offerings.
3. Mobile sales automation:
one prominent life insurance firm recently Which salesperson today doesnt sport a
smart phone, tablet, or several of each? Accordingly, tapped Innoveer to help make its
CRM software more mobile. The business driver is simple: to provide field agents with
rapid access to complete customer and broker details, so they can more rapidly court
customers with profitable proposals.
4. Social Monitoring:
While insurers arent adopting social technology as quickly as some other industries,
such as high-tech companies, they are beginning to pursue projects that help them
monitor social networks for favorable mentions, as well as distraught customers who
need assistance.

4 Key Reasons for Implementing CRM in Insurance

Insurance is a volatile sector. Reputations can be damaged and restored within a
span of months and government imposed regulations can make margins appear and
disappear almost magically. The sector however is one of the most dynamic in the
Indian business landscape and the keenness of international players to invest in it bears
testimony to the massive potential it holds. In the domestic space too, there have been
some massive transformations, LIC faced competition for the first time in decades in the
life insurance segment with the pie in the non-life and health insurance segments being
shared equally. These developments in the sector have made it even more important for
companies to be abreast of the latest tools and solutions so that they can be a part of the
race where some of the best names in the international market have already made their
presence felt. With the lobbying for removal of the FDI cap of 26% in insurance getting
more intense by the day, it is clear that the sector is on an upward incline for a major
boom. Streamlining business operations and managing customer data therefore have
assumed more importance than ever - the role of CRM in insurance sector is now
crucial.
1. The winning factor

While the banking sectors business does not completely depend on the customer
database, the insurance sector cannot exist without a solid set of databases that include
existing customers as well as prospective ones. Procuring these databases is also a major
challenge in this sector and therefore optimum utilization and proper management of the
data could well be the winning or losing factor for a player. In an industry where the
competition is so intense, making customer related data accessible to the sales,
management and customer service team in the most efficient, cost-effective and timely
manner is a challenge for any solution provided. Ensuring that the firm is in line with
the IRDA regulations and there is ample scope for the launch of a new marketing
strategy is no longer a decision made randomly by the board, but a logical deduction
from the CRM data that is on the table today.
2. Integration and segregation
Two of the biggest functions of CRM in the present market scenario are therefore
integration and segregation. Integration of the data from across the various departments
and technical, meticulous and efficient segregation of this data related to claims, policy
holders, expired/ new policies, corporate clients, prospective clients, third party policy
sellers and agents among others is thus essential. A company choosing to upgrade their
existing CRM or implementing a new one to keep up with competition should therefore
look for high levels of customization when it comes to these two processes.
3. Customer grievances
Some of the common complaints against insurance companies remain delays in claim
settlements, inefficient customer care officers, cumbersome paperwork and opaque
claims processing routines. Insurance players in the health and life insurance space have
to be doubly careful when it comes to handling customers, sentiments can run high and
the media can be quick to spread disrepute. Single point of contact for most departments
9

related to customers, easier navigation, interactive online and telephonic presence with
friendlier call center executives are some of the solutions that can be implemented apart
from high-end CRM solutions.
4. Changing landscape
The customer today has more money and knowledge than ever before. Impressing them
with typical CRM tools like seasonal and birthday greetings is no longer effective. The
need of the hour is comprehensive KYC packages where personalized and customized
services are provided. With the rapid expansion of the customer base, risk management
has also emerged as a major challenge and CRM solutions can go a long way in helping
companies implement effective measures to manage risks. Solid portfolio management
used to be a manual process even a few years ago as there was a great deal of analysis
and inference involved. Today, however, CRM solutions have the power to replace the
analyst and come up with inferences that can help the sales team make clear decisions.
Solution providers for CRM in insurance sector are likely to look at the potential of this
market and therefore come up with better-customized, efficient, real-time and costeffective solutions for the insurance sector with special features for Big Data, social
CRM, email syndication, two-way SMS and more.

10

Role of CRM in Insurance

Customer Relationship Management, or CRM, is a catalyst in insurance industry
growth. Replacing the traditional in person encounter of door-to-door sales, the CRM
system engages solid business relationships to meet customer demands for better results.
Customer relationship management technology is proficient in qualifying leads, policy
administration and streamlines various work functions to successfully service an
insurance business. Continuing developments are providing the insurance industry with
customized solutions to satisfy consumers and increase profits.
1. Customers
Success in the insurance sector originates from positive customer relations. Using CRM
for your insurance book of business allows you to track leads, maintain customer
profiles, provide more personalized service to meet specific needs and build customer
loyalty. Tools for communication, such as email, enable lead, client and contact
management.
11

2. Marketing
CRM offers a model for effective product management. Combining CRM solutions with
industry legacy systems immediately channels product enhancements while tracking
new product releases. This advancement allows insurers to meet the needs of policy
holders within a shorter product development cycle.
3. Productivity
Productivity and sales performance can be monitored with CRM tools. Results can show
which objectives are being met as well as areas needing improvement. After
implementing a CRM system, a leading insurance brokerage and risk management
consulting firm was able to meet set goals on performance metrics for 7,000 global
employees, according to Salesforce.com. Contact center solutions improve claims
procedures, providing first rate customer service while meeting business requirements.
4. Organization
The processes of underwriting, claims processing and support are well structured using
industry software to produce positive results. Claims solutions have provided built-in
analytics, enabling an insurance carrier to save $4 million annually and achieve 1
percent reduction in loss ratio, according to Oracle's website. This type of efficiency
strengthens relationships and keeps work processes at a high standard
5. Industry Growth
The insurance industry has experienced broad strides within its corporate structure in
addition to the field division. Alleviating risk, meeting diversity needs, improving
financial challenges and employee operations are some of the successes that customer
relationship management has brought to the insurance industry. More insurance
12

companies are using advanced CRM technologies to meet the needs of an increasing
customer base for better retention rates and profitability. Software developers have
recognized this growth and are adapting technologies by offering solutions specific to
the insurance industry's needs.

CRM Techniques
Maintaining good relationships with customers is important in securing further business.
Customer Relationship Management (CRM) is at the heart of all customer-focused
businesses. Repeat business is important to most businesses, and maintaining positive
relationships with customers is vital in helping to maximize the amount of business
transacted with them. Maintaining good relationships with existing customers is also a
form of indirect marketing, as existing customers are then more likely to recommend the
business to others.
1. Tracking Customer Contacts:
An important aspect of CRM, is tracking and logging all contacts with customers and
prospective customers. The nature and outcome of all contacts should be monitored to
13

identify areas of potential conflict before they arise, and to understand which contact
experiences customers are happy with and which ones may need adjustment. Follow-up
calls to customers after any support or service interaction must be sensitively managed,
as it is possible to annoy customers by initiating too much customer communication.
2. Staff Development
Staff need to be aware at all times of the prevailing business culture regarding customer
relationships. A key area to look at is the development of communication skills. This is
particularly important in businesses employing technical support staff. It is important
that technical staff, who have one-to-one contact with customers at times when
customers are experiencing problems, understand the importance of maintaining a
positive, personal approach in all dealings with customers. Understanding how to
resolve the technical issues that the customer may be experiencing is important, but
supplying the customer with a positive experience may be the difference in retaining the
customer and the customer looking else where in the future. All staff who come into
contact with customers or their representatives should receive ongoing training in the
development of interpersonal skills..
3. A Customer Experience Strategy
Defining a customer experience strategy involves identifying the level of service the
company expects to provide to its customers. For example, a customer experience
strategy might include the goal that there must be a response to all customer complaints
within a certain time, if the complaint could not be resolved with the initial contact.
Another might be to ensure that customers deal with one particular person in the
resolution of all issues, or the processing of sales and delivery of goods and services.
Staff should be made aware that the defined customer services policy is important to the
14

business, and not an optional set of guidelines. The customer policy must be effectively
communicated to all staff at all times, and staff should be encouraged to participate in
the development of customer experience stategies, bringing the results of their
experience to the process.

CRM IN LIFE INSURANCE CORPORATION

INTRODUCTION

Present market driven society largely depends on customer satisfaction and loyalty to
sustain their presence in market and remain customer friendly among competitors.
15

Service industries mainly depend on their customers service and relationship to enhance
business and to reach out more new and new clients to add existing list. Customer
Relationship Management (CRM) tool popular in the present business trend as majority
of the service industry implemented this technique to remain number one is their
segment and also brings new changes in its services and products. Library and
Information centers come under the service sector need to adopt CRM technique to
improve in its overall service and products development. Basically libraries are
categorized into four kinds viz Public, Academic, Industrial and Research and
Development. Collection, services, information products and clients varies from these
different libraries according to organization purpose. Recent surveys predict that reading
habit decreased in students and more spent time in cyber centres to chat with friends or
surfing mail only few among them using it for professional enrichment.
Librarian/Manager priority is to taken care of every visiting library customer demands
and requirements. Only satisfied customer could be the repeated customers and
influence others to make use of library and information centers services and products at
large extent. Many of the university libraries wore desert look without expected number
of students, research scholars and teaching and no-teaching faculties reduced library
visiting by saying so many reason of improper arrangement or library not equipped to
deliver expected service or library staff not cooperative. To implement CRM method in
Library and Information centers not required any dedicated and available softwares in
the market. Most of the libraries in present days automated with available local software
to open software, to manage routine activities of department it facilitate to track all the
operations. CRM tool ultimate goal is customers satisfaction and loyalty. To nurture
these characters in LIC make use of automation software to analyse customers demands
and expectations through statistics that help to design prototype of how to carry out
CRM implementation. Earlier customers are having much patience to wait for
addressing queries or delivering services. The invasion of ICT made everyone (library
16

customers) to access needed information without wasting the time, it thrown challenge
to library services to adopt novel method to satisfy. In this juncture librarian/Manager
has to play key role to retain existing customer and add new customer through deliver
satisfactory services to them. Only happiest customer visits the library again and again
and brings their friends to also. Later they converted into loyal customers would bring
brand image to the LIC. Library staff behaviour is crucial to understand customers
requirements and expectations. Especially library staffs who work in help
desk/circulation counter have the chances of interact customers regularly should not
replies in sulk way or just shows fingers at someone else to transfer their responsibility
to their queries or assistance if they sought.
COMPANY PROFILE
The LIC is the largest life insurance corporation in India & countries largest investors .
It is fully owned by the government of

India. It also fund close to 24.6% of indian

government expenditure. it has assets estimated of Rs.8 trillion (US$ 178 billion). It was
founded in 1956.

CURRENT STATUS
Over its existence around 50 years. LIC of India which commanded a monopoly
soliciting & selling LIC in India created huge surplus contributed around 7% of India
GDP in2006.The organization now companies 2048 branches ,109 divisional offices ,&
8 zonal offices & employee over 1,002,149 agents. The corporate office of LIC is in
Mumbai. It also operates in 12 other countries. LIC started business with around 300
17

offices 5.6 millions policies and corpus of INR 459 millions(US $ 92 million) as per the
1959 exchange rate of roughly Rs. 5 for US $ has grown to 25000 servicing around 180
million policies and corpus of over Rs. 8 trillion. The recent economics times brand
equity survey rated LIC as the number one service brand of the country.

CRM Process
A typical insurance company has a huge customer base, varied product lines, multiple
distribution channels, and a market with a geographical spread. To effectively interact
with customers and design suitable products, the insurers' CRM strategy has to fully
utilize the potential of technology.
The CRM process in an insurance company could be divided into six steps.
1. CRM Initiative
Insurance business has been traditional and conservative compared to other financial
service markets. Hence making changes in the way business is run by introducing new

18

technologies could generate resistance and slow down the adoption of CRM. The
insurance company should first educate and communicate with employees at all levels.
2. Identifying Customers
Knowing our primary customers like policyholders, beneficiaries, insured, agents or
brokers is important while customizing and developing the CRM strategy because these
answers can significantly change how the design and implementation of the product is
done. A customercentric insurer must have a clear understanding of each of the
customer segments and build an infrastructure and strategy to provide them with
products and services that address the needs of each segment.
3. Collecting and owning customer data
To gain the maximum benefits of a total view of the customer, insurer should capture
and combine customer information obtained from Zonal offices, Divisional offices,
Branch offices, Agents, along with the customer data from the existing system. This
information gleaned from these sources must be combined with personal interactions.
4. Develop a definite ROI strategy
The insurer must have Returns on Investment (ROI) measurement in place to monitor
effectiveness and to justify future investment in CRM technologies. Instead of just
hoping to have better results, the company has to develop businessfocused ROI
criteria that will enable it to define, measure, and analyze the impact of CRM processes
and technologies on the business.
5. Create a realistic budget and timeline

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The CRM budget and timeline should be as realistic as possible, ensuring that any
project vital to the CRM deployment is completed within a timeline. Updating
administrative systems, updating websites, and web-based channels help the
organization to stick to the time schedules. A realistic budget helps the creation of these
instruments.
6. Seek experienced resources
Technological challenges, such as integrating existing IT system with customer- centric
solutions, may create challenges for insurance deployments. Hence, to implement the
CRM solution, insurer should ensure that the CRM seller and the company's IT
professionals have the technical proficiency and experience to integrate their resources
towards customer oriented solutions.
CRM Training for Agents
It is the task of the top-level and middle- level managers to train their agents to practice
relationship

management

and

build

relation

ships

with

their

clients.

1. The agents should be trained to analyze their environment (society, friends, peer
groups, etc) and build good relationships with their environment because a good
marketer

first

forms

relationships

and

then

sells

his

goods.

2. An agent should prepare a profile of the prospective targets (or potential clients)
3.

He

should

be

trained

to

interact

with

them.

4. He should be trained to build the customer database and classify them into potential
20

and

existing

customers.

5.The agents should be trained to get the feedback of the customers because insurance
selling is a confidence building measure where a relationship is built between the client
and the agent, which lasts for a long duration.
Customer relationship in Indian insurance Industry
Due to competition, insurers have taken initiatives by adopting technology to improve
their services to the policyholder in achieving lower turnaround time for insurance of
policies, customers servicing, complaint redressal and customer education. Business
processes have been computerized to keep track of the policies issued right from
inception to maturity, covering all aspects of administration, underwriting, claims,
commissions and insurance accounting.
Insurers have set up their websites for disseminating timely and complete information to
the policyholders so as to provide value added services to customers. Financial planning
tools, information about products, commission details, premium calculators, NAV
quotations, FAQ, etc, are made available to customers. A number of insurers are
designing enterprise portals to enable policyholders to query the status of their policies
to make on-line premium payment and provide a forum for registering/seeking redressal
of policy servicing related issues. Insurers have implemented facilities to pay premiums
through non conventional channels such as credit cards, ATMs, online payments,
standing instructions, etc., in order to provide hassle-free modes of payment of
premium.
Automated complaints management process, tracking them from lodging of customer
complaints till redressed, have been put in place by the insurers to handle any delay in
21

the settlement of claims. Toll free numbers and call centers have been put in place for
better customer reach. Insurers have also taken initiatives in developing Customer
Relationship Management (CRM) systems and grievances management process.
We can expect a further improvement in the customer service levels with:
*

Electronic

*
*
*

Electronic
Automatic
Direct

submission

of

proposal

forms

transfer

of

medical

data

underwriting

to

debits/electronic

reduce
payment

Easy

time
of

withdrawal

taken
premiums
facilities

* Regular updates on the policy status

Facility for the customer to procure data from the company website regarding premium
calculation, proposal tracking, daily NAV, switch funds, stock market alerts and
recommendations.
Conclusion
Insurance players should not be carried away by the apparent high-sounding appeal of
the CRM solutions. They should rather aim at acquiring what suits their needs. It should
be realized that it is for the enhancement of customer satisfaction and in the process,
business growth, that a proper CRM platform is required. As such, it calls for a proper
understanding of the customer's needs and desire. For a CRM system to be effective, it
must integrate analysis from all customer touch points, balance customer and
shareholder value, and drive business process refinement across the enterprise. Only
then can the success of a proper implementation of CRM be ensured.

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