CRM - A Boon in Insurance


By

Dr. N. Subburaj
M.Com, M.B.A, M.Phil, Ph.D, PGDLL&AL, B.Ed
Professor in Management Studies
St. Michael College of Engineering and Technology
Shathiyagapper Nagar, Kalayarkoil-630551, Sivaganga District.
 


Abstract

The customer service in the organization is really good, the customer is unlikely to look elsewhere. In fact, he would act as a great brand ambassador for the company, which would eventually pave the way for rolling fresh customers.  With the competition heating up in the post-liberalized insurance market, one factor that is contributing to the overall performance of an insurance player is Customer Relation ship Management (CRM). Each insurance is parading its own leverages in the field and high lighting the importance attached to customer service in the organization.  CRM is an organizational strategy to develop mutually profitable lifelong relationship with the customer. The primary objectives of CRM is to build and maintain a base of committed customers who are profitable for the organization. To achieve this objectives the firm should focus on the attraction, retention and enhancement of customer relationships.  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.

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.

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. Only then can the success of a proper implementation of CRM be ensured.

Introduction:

The customer service in the organization is really good, the customer is unlikely to look elsewhere. In fact, he would act as a great brand ambassador for the company, which would eventually pave the way for rolling fresh customers.  With the competition heating up in the post-liberalized insurance market, one factor that is contributing to the overall performance of an insurance player is Customer Relation ship Management (CRM). Each insurance is parading its own leverages in the field and high lighting the importance attached to customer service in the organization. CRM —Meaning

Customer relationship management to the literature, though several ideas of relationship marketing had emerged much earlier. He defines CRM as attracting, maintaining and enhancing customer relationship in multi service organizations.  CRM goes beyond the transactional exchange and enables the marketer to estimate the customer's sentiments and buying intentions so that the customer can be provided with products and services before he starts demanding. This is possible through the integration of four important components i.e. people, process, technology and data.  Thus CRM is to identify, establish, maintain, enhance and when necessary, also to terminate relationship with customers and stake- holder at a profit so that the objectives of both parties are met, and that this is done mutual exchange and fulfillment of promises.

Objectives of CRM

CRM is an organizational strategy to develop mutually profitable lifelong relationship with the customer. The primary objectives of CRM is to build and maintain a base of committed customers who are profitable for the organization. To achieve this objectives the firm should focus on the attraction, retention and enhancement of customer relationships. Other objectives of CRM are to:

* Use technology and human resources to understand the needs and behavior of present and potential customers.

*
Acquire, retain and establish mutually rewarding, one to one, relationships with customers.

* Provide better customer service to customers.

* Identify high value customers so that the organization can serve them better with differential service.

* Collect customer information at all possible points and making this information available to the entire organization wherever and whenever needed, so that the customer could be served better.

* Get maximum 'wallet share' of the customer

* Increase customer revenues by cross selling and up selling.

* Simplify marketing and sales processes

* Provide the level of service appropriate to high value customers;

* Integrate all customer related activities like marketing, sales, service in such a way that highest value is provided to the customer.

Need for CRM

Hyper competition has resulted in plethora of products and services, which in turn has led to crowning the customer as king.

Customer Services:

Expectations of customers rise exponentially with the refinements in IT based utilities. With a view to providing better service' insurance firms have been tactically adopting Customer Relationship Management (CRM) strategies. They have started with basic operational systems to integrate customer information from multiple channels and sales force automation. Technologies such as contact centre segmentation and campaign management tools are maturing and finding wider adoption with a number of insurance companies.  The key expectations in customer service in the insurance industry are:

* Speedy documentation and processes at the time of issue of policies

* Easy and simple procedures for medical underwriting

* Quick response to any changes related to the customer's policy, namely, change of name, contact details, assignment of policy or term reduction

* Prompt redressal of customer grievances

* Offer to upgrade the policy and provide flexibility to the customers

* Updates on the company's performance

* Information on a regular basis on the status of his account,

With CRM, insurers serve their customers better and increase their chances of retaining them, and their satisfaction level by having all relevant information necessary to make planning, product, and service decision throughout the customer life cycle.
 

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Source: E-mail February 20, 2011

          

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