CRM for Insurance – Challenges, Roadmap and Technology


A simple definition of CRM is “A system for managing a company’s interactions with current and future customers. CRM involves using technology to organize, automate, and synchronize sales, marketing, customer service and technical support.” Based on what CRM software has become over the past decade or so, it is easy to see why someone would assume that because CRM performs contact management or sales management, it would be the solution of choice. In short, if you consider various rankings and reports on vendors for CRM, it is easy to see that CRM has become the “Swiss Army Knife” of technology. With the notion that a particular CRM solution will meet the requirements for a myriad of use cases—it can do anything—this perception is a pitfall important for companies to notice.

CRM_blog-postCRM Challenges in Insurance

The U.S. Insurance Industry is complex, hard to understand, and difficult to ensure a “one size fits all” technology solution will answer each one’s requirements. The business requirements for a life insurance carrier with career agents is vastly different from a property and casualty company that sells its products through the independent agency system. Despite commonalities between a career agency or direct-writer model and one that uses independent advisors, brokers, or agents, the “one-size fits all” solution isn’t going to meet any of their needs. One of the harsh realities of insurance is that a continual tension persists between agents and carriers. Carriers view agents as independent businesses that are hard to control and are always eager to pass costs on to the carrier or to increase commission rates. Agents, in contrast, view carriers as large successful businesses with thousands of employees, sophisticated technology and resources, and the recipient of 85% of the revenue agents bring in. When you get into a discussion of technology, the agent is at a clear disadvantage because they are not experts in technology and don’t have large systems or information-management experience. They are dependent on the carrier for marketing and sales support.

In the independent agent/agency paradigm, the agency is the first line of customer engagement. Agencies are first and foremost in the Business to Consumer (B2C) realm and operate as a retail organization. Hence, in the insurance industry, agents were the early adopters of CRM and not the financially and technologically advanced insurance carrier, and this has remained true for many years. Because of the fundamental differences between how an insurance carrier operates and that of an agency, the role of CRM has grown with agencies as they evolved their own customer-engagement models. The challenge for many agencies is that they are fairly small with limited resources. Think of a typical Financial Advisor who has a few employees and is the sole generator of revenue. The amount of resources she can spend on marketing through a CRM contact database is limited, and consequently, the volume of business that she can do with a particular carrier is also limited. Although the relationship between carrier and agent has a certain amount of tension, it is symbiotic: to grow their respective businesses, the carrier and agent need to work together.

The basic difference in how the agent must go to market compared to the carrier is easily illustrated by the use of social media. Agents are at the retail level and work Business-to consumer (B2C), whereas at the wholesale level, the carrier works Business-to-Business (B2B). Social media is a great tool and resource for agents who know how to use it. For the carrier, social media isn’t nearly as compelling as it is for the agent or financial advisor.

CRM Still is the Swiss Army Knife of Technology

CRM has become a necessary business tool and application in virtually every industry. The challenge for an industry like insurance is to find CRM applications that are designed for the insurance market and not just a warmed-over version of CRM that the vendor is also selling to manufacturers, pharma, or some other industry vertical. Insurance has unique needs and operates very differently from other industries and requires applications designed to solve business issues that insurance organizations face each day.

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