February 24, 2016 by Canadian Underwriter
Four of 10 polled Canadian insurers recently reported that building good customer relationships is integral to their businesses, a view mirrored in a new FC Business Intelligence report that suggests analytics will be key to driving customer engagement in insurance and moving beyond lip service to customer centricity.
FC Business Intelligence’s Canadian Insurance Analytics Healthcheck – released last year and reflecting input from 100-plus Canadian insurance executives – found 43% of respondents said they feel the focus for Canadian insurers in 2016 should be on customer relationships beyond anything else. [click image below to enlarge]
That finding is in line with another company report, Building a customer-centric Canadian insurance industry, released in 2016.
“Customer relationships was second only to digital and analytics in the table of responses, but it’s interesting to note that these, too, are integral tools to build a customer-centric organization,” states the report, which offers views from a number of Canadian insurers on the topic of customer centricity and analytics.
Asked where analytics ranked in their company’s priorities, 10% of respondents noted it was urgent (number one project for the business); 72% said it was important (a top five priority); 15% said moderate (fairly important, but not key); and 3% said it was not important, the healthcheck survey found.
“The ability of using analytics to deliver insights across the organization is going to prove vital in informing how best to serve the customer and, indeed, 59% of executives will make this a focus in 2016,” notes the latest report.
Insurance executives interviewed for the customer-centric report agreed with findings from the healthcheck survey that found one of the biggest impacts of incorporating data and analytics into the organization would take place in underwriting (26%), followed by marketing (13%), pricing (10%) and actuarial (10%). In addition, there was claims (8%), strategy (7%), fraud (5%), distribution (5%), innovation (5%) and digital (3%).
Still, the customer-centric report notes companies are unlikely to make the decision to become so overnight. “Many are weighed down by years of process and product. Even those who consider themselves highly responsive to the new climate acknowledge that this is a brave new world for the sector,” it states.
The technical aspect of delivering customer-centric strategies is proving to be among the biggest headaches for executives, the report notes.
“With most insurers not lacking in data, this information is, nevertheless, sequestered in multiple silos, managed by several different and essentially incompatible systems as well as serving product creation rather than customer service,” it explains.
Although the shift from organizational silos is happening, creating proof points around investment remains challenging.
The executive survey found 36% of respondents claimed they were starting to see a return on investment from customer analytics, but 20% had yet to do so, and another 10% had resigned themselves to no returns for a further two years.
“The future for companies is to balance the product view with customer focus so they feed directly into the decisions you’re making,” Dennis Nilsson, RSA Insurance’s vice president and leader of the Centre of Excellence for Pricing and Underwriting, suggests in the latest report.
Janice Liu, CIBC’s head of digital personalization and campaign optimization, sales and strategy, notes that “once the decision had been taken to be much more customer-oriented in its approach, top level management will then take on the responsibility of driving this cultural change.”
Insurers are working to improve client engagement and they look set to become more easily categorized as service providers, the report states.
“Either the service companies are going to have to start offering insurance, or the insurers are going to have to start providing services. The odds of the latter are in our favour,” adds Carl Lambert, vice president of National P&C Business Intelligence at The Co-operators.
FC Business Intelligence will be hosting its 2nd annual Insurance Analytics Canada conference, titled Data Driven, Customer Oriented, Digitally Aligned: The Future of Canadian Insurance, on May 12 and 13 at the Old Mill Hotel in Toronto.