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The Insurance Network's 6th Annual Congress

Driving Profitable Growth in Turbulent Times
 by Graham Newman, European Product Marketing Manager, FINEOS

The Insurance Network held its 6th Annual Congress in London on the 28th November with the theme of “Driving Profitable Growth in Turbulent Times”.  The focus was on the general and London Market sectors and was well attended by the great and the good of the industry.  There were some excellent keynote speakers giving us their thoughts on how the thorny issue of driving profitable growth might be tackled.  Several themes emerged during the course of the day.  One being concern from the brokers that many insurers rewarded volume rather than transactional skills.  This theme was echoed during the day with several speakers returning to the notion of quality as opposed to quantity being the key to attracting business.  The point was made several times that good insurance was sold on the quality of underwriting skills and good customer service – with the strength of the balance sheet being important – but that premium price was not really the deciding factor.

I think it is often informative to look outside the insurance industry at other commercial areas – ones that typically do service much better to see what good customer service actually looks like.  I have frequently used the car manufacturer BMW as an example of quality, customised product and service and I was gratified to see the Bavarians being called upon again to illustrate a successful brand that equates to quality product and quality service.  The point was made that high quality service was not a hall mark of the insurance industry and that had to change.  This notion was expanded with the thought that the industry needs to develop an obsession with service and quality and not spend so much effort on reducing expenses.  Of course, historically it is the industry itself that has been telling customers that price is all-important and now it is getting what it deserves – an unhealthy obsession with reducing costs that is not what is required for good growth.

Another topic that surfaced again and again was the vital role that good, detailed data that could be transformed into useful information had to play in building profitable growth.  For so much of the time decisions are made using inadequate information or – perhaps worse – decisions not being made at all because information is simply not there.

The congress had six in-depth discussion streams over the course of the day, one of which FINEOS was sponsoring and so I chaired a session looking at the impact and challenges of mobile, social and eBusiness strategies.

Stream 2 – Levering the Benefits of Technology

There is a plethora of subjects that could be examined under this title – even without getting too technical.  We focused on two topical and closely related areas, two facets really of one problem.  We examined the rising phenomenon of social media and its closely related sibling mobile media and then looked at the issues around how these combine with the existing demands of the business and existing systems capabilities to produce a holistic – and above all effective – eBusiness strategy.

There are some interesting and very new challenges to be faced by the insurance industry in coming to terms with – and making best use of – the phenomenon of social and mobile media.  The advent of 3G brought a whole range of new uses of technology into play and more importantly the introduction of new technological capabilities such as these has resulted in unforeseen uses.  These technologies are very “open” in that they are not “prescriptive” as traditional systems always have been.  The user manuals for social media sites and mobile communication tools such as Twitter would be pretty thin – which is probably why the originators never bothered to write them.  The tools are so open that the general public writes the rules as it uses them.  With 4G now in our midst those capabilities are set to grow at an exponential rate and we in the insurance industry have to make plans as to how best we can make them work for the benefit of the industry and above all for the benefit of our customers.  It’s something that strategists and managers in the industry have to ponder while making these plans.  As Neils Bohr, the famous Danish physicist once said “Prediction is very difficult – especially about the future”.

The first panelist, Lukas Oberhuber, Chief Technology Officer at Xbridge took us through his views on how – indeed whether – mobile and social media will work for the insurance industry.  Lukas made the interesting point that a lot of mobile and social communication is not necessarily on the high-tech side; a large proportion of it is via SMS, which is quite low-tech.  He followed on with some observations on mistakes commonly made by companies using such media.  Sites that do not load quickly, or are poorly optimised for different channels can elicit an instant poor reaction from users who often will never return to a site that is difficult to read or slow to appear.

The spectre of malicious intent raised its head during the panel discussions.  This is simply something that has to be dealt with, and requires vigilance.  Bad press can proliferate rapidly over social and mobile media sites and as a PR problem it requires a PR solution.  My thoughts on this are that companies must have their plans in place to deal with such events before they happen so they can execute them swiftly.  Speed is of the essence in social and mobile communication and issues that are left un-countered can soon become highly problematic.  It’s no good waiting until the proverbial hits the fan and then convening a meeting to think of how to react.

Another issue that attracted much interest was that of identification.  It was asserted that the industry currently does very little to really check the identities of on-line contacts and that there are, in fact, many new opportunities to take advantage of the high levels of connectivity that exist.

That consumers will increasingly use and rely on social and mobile media was accepted as a given, as was the thought that insurers are not likely to be leading the way in exploiting these new ways of engaging with and serving our customers.  I have always thought that the important lesson is to embrace the new channels; they can be used in such useful and creative ways.  Firstly they must be recruited to the task of building the brand; access should be easy, informative, useful and fun in a low key way, they aren’t comedy sites after all but there is no reason why they should be dull and worthy.  They may be used to check out what the competition is up to, and for much wider market research into what customers are buying and what they value.  It is very important that these sites of activity be looked upon as rich resources, not threats or even as a chore that has to be dealt with out of duty.

I also feel it is vital that they are treated with appropriate levels of seriousness.  I have come across companies that delegate the monitoring of social networking sites to a small, rather casually constituted group of younger staff – “Well, after all, it’s a young person’s thing isn’t it?”.  This simply will not do, and it needs to form a core element of an insurer’s marketing strategy.

Peter Leahy, Head of IT at Endsleigh Insurance talked on the problems of bringing all this wonderful, bright, shiny new IT that deals with this new social phenomenon into close and meaningful contact with all the grumpy old software we have in our organisations that actually does all the work.  He quickly made clear that for most organisations attempting to integrate everything in the back office, to make all the legacy systems socially aware, was simply not going to work.  The task is too big, too costly and will take too long.  Far better to be properly selective and choose integration where it will really have a clear benefit.  He also made the telling point that some of the new data that will be gathered through the new channels of interaction simply doesn’t need to be linked to existing back office applications.  Much of what we will now collect is relevant only to the levels of contact and identification.  It is an important task to look closely at all the data we gather and analyse precisely where it belongs; because it’s unlikely that it belongs everywhere.

I found this panel discussion most interesting and the very high levels of engagement from the audience would indicate that this view was widely shared.

Please check back tomorrow when I will review the remainder of the conference.