The industry needs to get better at using data for cross-selling and upselling opportunities, according to expert panel

The insurance sector is currently competing in a “digital arms race”, as firms look to better use data to switch from a “policy-centric” approach to being “customer-centric”, said Benjamin Turner, strategic account director at Salesforce.

Speaking a webinar jointly hosted by the Managing General Agents’ Association (MGAA) and insurtech Aventus, titled ‘CRM: How to win new business in 2021’, Turner explained that insurance companies currently fall into three categories when it comes to their technological aptitude: hibernating, evolving or digital native.

Hibernating businesses are “going to be in trouble”, while evolving organisations need to speed up their existing digital journeys and not just rely on a new website. Digital native firms, on the other hand, have data at their disposal to be able to inform business decisions.

“It’s a digital arms race at the moment,” Turner said, as the industry is in a “customer experience war”.

Fellow panellist Peter Goodman, chief executive of Aventus, agreed. He said that digital transformation is not just “a shiny website”, but should instead be something that is “embedded as a culture across the business”.

Rethinking outdated mindsets

A key facet of insurance firms’ digital journeys, according to the webinar panellists, lies in using a customer relationship management (CRM) system – such as Salesforce – to better understand customers.

In turn, this facilitates the cross-selling and upselling of relevant insurance products to existing customers, rather than constantly focusing on the hunt for new clients. Goodman added that many insurance businesses do not upsell enough due to “disparate” back end systems and too many data siloes.

Turner agreed, noting that the insurance industry has “always been bad” at cross-selling; he believes that personalisation and data is critical if firms want to improve their upselling capabilities.

For Sam White, chief executive of Freedom Services Group, Action 365, Pukka Insure and Freedom Brokers, underpinning the use of CRMs to flush out useful data for cross-selling and upselling opportunities is a “mindset challenge” that first needs to be rectified.

She explained: “One of the biggest challenges that we have is customer expectation is far higher than we’re currently delivering. We have a tendency to think in terms of policies instead of in terms of customers. We’re just not very customer friendly.

“We are very fixed in a mentality that we are selling somebody a policy, that the only thing that we need to be interested in is the underwriting risk information and how that may change over time and how much money we are going to get out of it.

“Actually, if we just lift our heads up a little bit and have a look on a broader basis to that individual and their life and how insurance can potentially enable them to have better lives and protect the things that they love and what, therefore, can I do to help achieve that? What information can I garner between me and the customer to be able to get to that end goal? You’re just going to be in a far, far better position moving forward.”

Turner described this as “a total mind shift in terms of [being] policy-centric to customer-centric”.

White added that insurance businesses need to start by reviewing what product features customers actually want – she believes that many insurance products are built by underwriters to manage risks rather than “delight customers” and that a two-way conversation between firms and customers is needed in order to encourage “organic evolvement”.

Businesses often sell insurance products that work commercially, without exploring whether the cover is actually suitable or wanted by the customer, she continued.

Turner advised insurers and MGAs to map their customer journeys and re-evaluate the touchpoints to see where there could be possible gaps. Both Turner and White spoke about Amazon raising the bar here and helping to set high customer expectations.

One stop shop

The panellists think that housing data in one place, such as a CRM system, helps to present a more complete picture of customers’ lives and, therefore, their insurance needs.

Removing siloes, and therefore barriers, enables firms to do more business with existing customers, Goodman added – he said it is more about digital “enablement” rather than “transformation”.

Turner added: “The industry has been, ‘transformation’, it sounds a scary word, all of this sounds scary – digital. It goes back to that mindset piece.

“The beauty of what Aventus has got and what Salesforce has got, most of this stuff is configuration rather than heavy lifting around creating big systems and getting developers. There’s a notion, I think, within the industry around all these big policy claims systems and the typical time it’s taken to see the benefits of those systems come in.

“A lot of the [CRM] systems, a lot of that functionality is already pre-configured. What you’re actually doing is plugging your own crown jewels into it, whether that’s your pricing, your product algorithms, your marketing, your customer data. So, it massively accelerates that time to value.”

For Goodman, CRM systems should be aligned with policy administration systems – he believes that “futureproofing is about ecosystem creation” and that there has to be an “augmentation” of different software in order for businesses to capitalise on the best technological solutions.

This becomes more important when considering the evolution of insurance products themselves, Goodman added, as they are likely to become more tailored and personalised over time.