The term ‘single customer view’ has been a buzzword for a number of years now, but how close it is to being a reality in insurance? With this in mind, Post, in association with Marklogic, held a roundtable to discuss the importance of SCV, and how to break down barriers to implement it
There are few sectors that could benefit as much from having a single customer view than insurance. Far too often, policies are sold on a case-by-case basis, with little or no prior knowledge of an individual’s needs, other than those supplied at point of quote. Certainly, there are a growing number of insurance practitioners along with data specialists who believe this is a massive missed opportunity.
But, what are the barriers that prevent achieving and benefiting from having a SCV? To discover attitudes and intentions, Post in association with Marklogic held a roundtable event attended by a range of insurance providers, including large personal and commercial lines insurers and brokers and niche operators.
First to be covered was cross-selling and the current problems around this – attendees were asked if they were already using an SVC or investing in appropriate technology to enable this.
Andy Marlow, head of sales and service at Trade Direct, pointed out that despite the desirability of the SCV, the General Data Protection Regulation environment had created additional challenges: “It’s important to make sure we have consent and we’re taking time to gather this – but it’s not always straightforward in terms of knowing what you can – or cannot – contact customers about. GDPR and being compliant has put the cat among the pigeons.”
David Carey, head of mid-market at Aviva, said a more joined up view of data was being actively sought but agreed that the structure of different business decisions caused difficulties. “You can have a lot of knowledge about a customer when they transact with you but it’s in individual product lines – so bringing this together and getting the true customer view – is something that we want to overcome and we are working on that.”
Richard Webb, director at Manchester Underwriting, added there was also a ‘behaviour’ element that needed tackling. “It’s a great concept but there are some underwriters who will be reluctant to share data – they have a particular product line which is their area of expertise and they don’t want to damage that relationship with a bad experience with another product line.”
And Bent Isachsen, chief information officer at Starstone agreed: “The situation is that you have structures where individual underwriters are responsible for their own profit and loss. We can potentially cross-sell to our high net worth customers, but it’s less easy across specialist lines because underwriters are responsible only for their specific product line and how it performs – even though we are trying to work together more.”
This was also an issue with some, but not all, brokers, according to Webb: “There is certainly more awareness of the SCV but the individual focus on profit is stopping some brokers cross-selling, whereas others are set up differently and are doing this very effectively.”
Ben Platts, head of operational excellence at Zurich, said change was being achieved within his business: “We’re using a different model and whereas once we had a single product view and life and general were quite separate, now our structure is far more about looking across the whole piece, so as in retail, you can offer customers a whole suite of products such as car, home, boat, travel, protection and more. It works, but you do need to look at the way you are set up and how people can be motivated to work together. To get to this stage you need support by the whole organisation, from the board down.”
While Graham Davis, customer and strategic insight manager at Ageas, remarked that SCV was absolutely essential where insurers sold through different brands. “You need the offering to be relevant if cross-selling and without an SCV you can end up with one brand contacting another customer and that’s unhelpful, although progress is being made.”
Customers over products
Paul Williams, marketing director at Jelf, pointed out that the SCV should focus attention on understanding customers first and foremost. “We need to discover what customers really need – not just think about how we cross-sell. It should be about providing a better service – let’s do more to find out what they actually want.”
Tim Yorke, transformation director at Axa, agreed it was time to move away from the idea of insurers as “product sellers” and he said the SCV would facilitate this. “Even pre-GDPR, there was a poor track record in cross-selling and now we should be thinking far more about our initial engagement with customers and in building a relationship with them and less about product selling.”
This had the backing of Gavin Dobson, group head of marketing and e-commerce at Hood Group: “Customers don’t want to be cross-sold to but they do want to be understood and we should be focused on this and use data to be a lot more joined up.
Carey agreed but added fundamentally, insurers would always need different employees when customers had specialist needs – the issue was in properly sharing data.
“Someone needing professional indemnity will appreciate guidance from an expert but we should make sure that if they then buy HNW that this information is on a single platform.”
Time to invest?
The conversation moved onto the pros and cons of customer relationship management systems that were once seen as being a holy grail but are now treated with more scepticism and whether there was a willingness to invest in SCV technology. As Yorke said: “The problem with a CRM is that it’s more of a sticking plaster approach – what you actually need to do is bring data together.”
Webb pointed out that while the benefits of an SCV were clear, it was also necessary to convince finance directors of the need to invest. “This is about a strategy of people and technology. But, if you have an insurer operating different brands and white labelling it brings complexity – it’s not always going to be easy obtaining that investment unless you can show what the worth will be.”
Bringing in the technology is one aspect but it needs to hold the right data. Jon Mansley, head of digital strategy and proposition at LV, said that using SCV to enable simple multi-product discounts to cross-sell was woefully unsophisticated. “There is no point if offering discounted household insurance to a motor customer without having full knowledge because they could in fact be living on a flood plain. To date, customers are about point of time transactions and what we need to see is customer level pricing.
“We may well be holding data based on question sets, but we also need to see if we can go beyond this information and that could mean having a different conversation. One of our main challenges is to create a more tangible experience – and that’s going to mean a big change if we are going to use data differently.”
There is clearly a need to gather more data and enrich existing information that is held, yet this is also about increasing the time taken to talk to the customer whether directly or online – and attendees were mindful that many wanted to keep their interactions brief.
As Charlie Blackburn, chief technology officer at Azur Underwriting, pointed out: “We do want to know more about customers, but it can’t just be about us contacting them at our time of choosing. Convenience is the main thing for many customers – in the US, for example, our customers buy via an app on their mobile, they just click the accept button, cover is bundled in with a loan and it’s arranged fast.”
He added he saw advances coming from insurers working with and designing cover specifically for communities – such as business professions – but using technology to sell in a way that is seamless and frictionless. “The industry is not there yet, but this is something SCV should enable.”
Owen Woods, marketing manager at Hamilton Fraser, said gaining further insight would also entail more investment in appropriate products. “Much of what we’re talking about is becoming customer led and not product led, and that is what will also drive loyalty. It’s a different philosophy - but it will also mean ensuring we have product segments that might only suit a relatively small percentage to whom we can bring real benefits. Data can be used in far better ways to tap into the customer lifecycle and nurture them so they become more profitable.”
Marlow said it could take some convincing to show that new systems would result in higher returns: “There is a need for investment but you need buy-in and to show how it’s going to work.”
Even so, as Webb added, seeking to satisfy customer demand based on holding an SCV would invariably create some issues since there remains an emphasis on cherry-picking more profitable lines.
Jon Bradshaw, head of product at Markel International, added: “Let’s see if we can learn from others – take some of the most progressive organisations, particularly on the tech side, then they tend to appoint chief customer officers – this would be a real shift of culture to see things through the customer lens and this is something we could learn from.”
Who benefits from the SCV?
Knowing the customer and having the right offering matters, but ridding an organisation of a legacy system that is preventing an SCV can involve a large capital outlay.
While it was agreed that smaller organisations had an advantage in utilising technology to secure an SCV, it was pointed out that the investment should bring long-term benefits to the large operators, through increasing net promoter scores, marketing success and claims performance.
According to Carey it should also increasingly be viewed as a necessity. “There are threats out there and we need to work hard on moving on from legacy – there needs to be a strategic desire and it also needs to come from the top. The insurance sector, as a whole, needs to adapt.”
Isachsen added he felt the SCV could also be used to educate and inform customers more effectively with tailored risk management. “Customers don’t want to know about business interruption – they want to know how to avoid having a claim.”
“We should be able to look at claims patterns better so that we can help customers take a more risk adverse approach – this would really add value.”
Ready to meet competition
A lot is talked about whether companies such as Amazon or Google could enter the market in a significant way. Yorke said customer data, such as that held by telematics devices, could create opportunities by alerting insurers to when customers were poised to go abroad – and needed travel insurance.
Webb added that Facebook already had the ability to create accurate profiles of potential insurance buyers. But as Dobson commented: “Customers need to be reached at the right time if they are to buy – we need to gain that understanding but we also need their permission.”
Yorke said the need to ditch legacy systems is widely accepted, with single structures being the way forward. Beyond this, insurers are showing willing to invest in their data sources to enhance underwriting and the customer experience – even though this frequently involves cost. Further, as Yorke said, the internet of things will result in swathes of fresh data, such as from smart buildings, and this must be used with intelligence by insurers.
There was acceptance that complacency is not an option. Could Amazon’s Alexa start selling personal lines? Yes, and perhaps commercial too was the view. Blackburn said that more involvement from outside players was indisputably under consideration: “If they can get it right and handle losses, why wouldn’t they?” Isachsen agreed, saying that although far from easy, with the right people, sufficient capital and an insurance license, the door is open.
Some comfort could be taken from the fact this is a cyclical sector – Bradshaw noted, a change in market conditions could certainly prove off putting to those pursuing quick returns.
Although the barriers to entering the market are reducing because of technology and the quality of data, insurance is far from straightforward and depending on the class of business, brokers provide an extra layer and further challenge. As Williams said, brokers’ expertise in advising on the many different products that are often required is not easily duplicated. Carey agreed: “You still have community brokers who are thriving and who are meeting their customers’ needs.”
So, an SCV backed by customer-centric service is certainly a way forward. The event closed with Rodrigo DeCossio, UK insurance lead at Marklogic, stating: “It is not just insurers who are working in silos – it’s an issue that affects many others, but it is also encouraging to see insurers talking about the problems and realising that legacy is holding them back. Already there is a lot more awareness of how an SCV benefits claims and marketing – but this needs to be a board-level initiative as it should be company-wide. The business value in an SCV can be radical across the whole business and there is growing realisation that the insurance market can now do something about it.”