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LONDON, UK - 25 Jul 2013: Insurance companies are failing to capitalise on the customer data they hold, a survey by IBM (NYSE: IBM) has shown. A large majority of the 50 senior information technology (IT) decision makers within UK insurance companies questioned (84 percent) said their company does not integrate customer data into a single database. Many of the companies have issues either collecting customer data or using it effectively.
Failure to integrate data and create a ‘single view’ of each consumer makes it impossible for an organisation to respond to varying and individual customer needs, in an industry where personalisation of services is increasingly important.
The survey found that:
· Only 16 percent of organisations integrate customer data across their IT systems into one central database. For 38 percent there was no integration, with each line of business or broker operating their own database. At other companies there was some form of data integration, but silos still existed.
· Data generated by quote engines across various sales channels (such as face-to-face, call centre, website, mobile or broker) is totally integrated and accessible at fewer than a quarter (24 percent) of organisations.
· 54 percent of companies said that six or more separate IT systems / databases exist within their company
· Only 4 percent of companies said they capture and retain one hundred percent of customer data based on their transactions with them. On average companies captured and retained 64 percent of customer data
The findings will worry Chief Marketing Officers (CMO) responsible for the customer experience, as IBM’s 2011 CMO survey found that the explosion in data is the biggest challenge CMOs expect to face and 43 percent claimed lack of integration is the main barrier to using technology. As getting close to the customer is the top priority for both the insurance CEOs (IBM 2012 CEO study) and insurance CMOs, the inability to optimise the data for insight - and respond to the customers as individuals is problematic.
“Insurance must be sold rather than purchased in mature competitive market, and lack of data integration will affect companies’ ability to drive sales, as loyalty and advocacy increasingly depend on businesses being able to provide a personalised customer experience, based on customer insight,” said Danny Lee, worldwide insurance industry Smarter Commerce Leader, IBM.
The survey found that over half (57 percent) of insurance companies claiming to use basic databases and spreadsheets to collect, manage and analyse customer data felt they were performing poorly at winning or retaining customers; this compares with only 8 percent of those using business analytical tools for the same purpose who felt the same way. Almost nine out of ten (88 percent) expressed concern at how a lack of customer data integration could affect sales.
The companies using business analytical tools claimed to be able to collect 76 percent of data generated during customer transactions; while those using basic databases and spreadsheets could only collect 57 percent of it.
“Insurance companies often operate in silos for each line of business. In order to strengthen the brand perception in each customer interaction, IT and marketing need to work together to provide that consistent experience that reflects the insurer's overall business strategy. The IT and marketing teams have to be the glue and enabler to a consistent customer experience by looking at their customer holistically across line of business,” said Lee. “There are company-wide aspects to business intelligence and customer insight but the insurer must also accommodate the needs and access that vary department by department. That is why business and IT alignment and integration are critical elements to better selling and servicing the insurance customers.”
When it comes to their websites, organisations said that on average fewer than one in five (19 percent) of their quote requests came via their website/online (the largest proportion - 28 percent - of quote requests being made via call centres).
· 34 percent of companies rated their website poor at delivering new business
· Only 2 in 5 companies have the ability to follow-up ‘abandoned baskets’ on their websites
“The servicing of a claim and policy changes are the ultimate opportunities to gain more insight about a customer’s needs, address potential issues pro-actively, create that positive experience, and gain customer mindshare / loyalty - and therefore, provide the opportunities to effectively upsell to them; but insurance companies are potentially missing the opportunity to improve the interactions with the customers - and improve the overall level of satisfaction,” said Lee.
When asked about their IT priorities for 2013, the companies rated streamlining processes as the most important (88 percent rated this as important to very important), even above meeting regulatory requirements (66 percent), data security (64 percent) or cost savings (62 percent). ‘Greater customer understanding’ came last on the list of priorities at only 50 percent of companies rating this as important to very important.
The research was conducted by Vanson Bourne, a research based technology marketing consultancy offering clients analysis and advice based on incisive, rigorous research into their market environment. For more information, visit www.vansonbourne.com
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