General insurers have a daunting CRM task to face, according to Robert Hall, CEO of ActionSystems Inc., a leading CRM solutions provider.
At a recent workshop on Customer Relationship Management in Insurance hosted by ActionSystems UK, Hall declared: "As insurance companies face up to their CRM challenges, it has become habitual to focus on the problem of customer retention, which is low. But nothing creates a retention problem like attracting the wrong customers in the first place."
Hall, author of the best-selling The Streetcorner Strategy for Winning Local Markets, went on to explain that opportunities lie in "determining which customers to 'REAC' -- that is, which to Retain, which to Expand, which to Attract, and which to Cost-manage."
David Cotterell, Managing Director of ActionSystems UK, emphasised the point, saying: "CRM technology can assist, but what the industry really needs is a sales and service delivery work force capable of delivering the right value to the right customers. Our experience shows us that just a 3-5% improvement in shifting the mix of customers can yield 15-30% improvement in profitability."
Director of Marketing Practices at Royal & Sun Alliance, Richard Drinkwater, agreed. "We want to integrate the various parts of our organisation with sales and marketing," he said, "so that we know which customers we should target and how."
During the workshop, which was attended by delegates from such leading UK insurers as Churchill, Folgate, Hastings Direct, Liverpool Victoria, it was also pointed out that there is a need for broker relationship management in insurance, as well as customer management, adding to the challenge.