CRM in insurance: A novel way to beat the odds

Essay by bhramaraUniversity, Master's March 2004

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CRM in insurance: A novel way to beat the odds

In today's dynamic world, the importance of good customer service is becoming more and more apparent. With the blurring up of differences between banking, broking and insurance; coupled with industry consolidations; demutualization; shrinking margins; profitability pressures; and new distribution channels; the insurance companies are being forced to rethink their business models for survival. Today's customers are more sophisticated and are more willing to explore alternatives to traditional insurance products and how they are delivered. The task of getting and keeping customers requires even greater skill and effort. Getting closer to customers and effectively responding to their needs is a great way to boost their loyalty and encourage deeper business relationships. It is also a much more strategic route to success than cutting costs and improving efficiency. As companies engage in the battle to win over a larger share of customers, corporate interests in the concept of customer relationship management (CRM) have grown dramatically.

CRM technologies focus on managing all interactions that an organization has with its customers, in order to leverage the data in a variety of business applications.

Globally, industry executives are struggling with the complexities of CRM, trying to understand what it can mean for their organizations and how to proceed to adopt appropriate CRM solutions. Combined with challenging economic conditions and continued stiff competition, the insurance industry can no longer operate under one policy model. Instead, it must adopt a new client-centric approach to meet the needs of its customers better. While CRM is not a new process, its evolution over the years has changed the way businesses viewed and interacted with their customers. To the point that many insurance executives are now discovering CRM to be a valuable corporate asset - one that can directly impact...