Topic of Discussion: Winning with Technology and the Internet (Mr. John Castree, FirstApex Co. Ltd.)
Source:
Mr.John Castree, FirstApex
Abstract:
Recognizing the importance of Internet as a key strategic business enabler is essential. The Internet will drive the next economic boom through greater connectivity. We have seen huge change in just a few years but there will be greater change in the years to come. We will see universal broadband access available to mobile and fixed line, almost unlimited network availability, global virtual malls such as reinsurance exchanges and e-markets for service providers. Real-time enterprise wide computing will be the norm.
"Traditional" insurance companies need to position themselves now for this change - a difficult decision for a conservative industry where risks are managed, not taken. Failure to change, however, may mean risking extinction in the near future. This is even more important in the light of globalization where deregulation will see a whole swathe of new competition selling insurance and related services. Banks will be key with their financial might, but any retail company could be a competitor. In the U.K. for example, super-markets such as Tesco are already successfully selling insurance. Newly deregulated markets are opening up too - such as India and China - and new world beating companies will emerge. Country differences will disappear, barriers and restrictions will be removed; globalization will allow companies to be 11 globally local", to sell an insurance policy from a company in New York to a customer in Cape Town.
All of this change means that today is insurance companies need to be ready. How can companies leverage the Internet for commercial survival? The answer is a combination of flexibility and technology. Let us consider some key areas.
The Customer Is King.
Customers are most precious assets to a company - expensive to acquire and easy to lose, they must be handled with care and nurtured. This translates into tailoring products to your customers needs, being "open for business" whenever your customer wants to deal with you, having the most up-to-date information available at the disposal of your staff at customer touch points, and giving your customer a consistent experience. The Internet has given the consumer the power of knowledge - the power to seek out the lowest or best insurance coverage. The informed consumer is now choosier about what he or she wants, and standard insurance offerings of the past will not be able to compete in the future. The Internet drives the need for more flexible product design, the ability to mix and match coverage, and the introduction of non-insurance elements, such as lifestyle benefits and services. IT systems need to be flexible in design to support this. "Hard coding" of anything will be a thing of the past, replaced by full parameterization.
Being available 24/7 to service the customer will be a basic requirement. This may not necessarily mean having people in the office on a 24/7 basis but it will mean utilizing technology to give that impression. Different channels will be needed to provide service and support to the customer, such as Web/WAP portals, call centers, kiosks and ATMs in addition to the more traditional brokers, agents, banks, etc. At the heart of this must be a client-centric enterprise systems), Web-enabled and with XML interfaces to support all distribution channels and external interfaces. Being browser-based, the system and its interfaces can be deployed at any location. The XML interface will support different presentation layers (or customer experiences). Full integration of back, middle and front office systems, integration with payment systems and business partners will be essential to achieve real-time computing, and standardization is vital. A typical scenario might be a customer accepting a quote from a producer’s portal, which is then converted to a policy at the insurance company, any reinsurance automatically placed and the policy document is emailed back to the customer with the premium deducted and transferred straight to the insurance companies bank account. Financial statistics are updated online; all applicable information is available to all channels for reporting. The initial cost of setting all this up will be offset by lower running costs and reduced future cost of change.
Customer loyalty will become harder to achieve and maintain. Companies able to give the best overall experience to the customer will profit.
Salesman is the Shop Window
For companies following a direct model the newer distribution channels mentioned above are most relevant. However, many companies will continue to rely on intermediaries as a significant channel for getting business. This is especially true in Asian countries, where relationships are culturally significant. Mobile workforces will have to be equipped with the right tools to do their job, such as a mobile phone, PDA or notebook computer. Leads management, financial needs analysis, "what if pre¬sales illustrations, quotations and servicing existing policyholders will require support systems. Intermediaries will become more IT-savvy; systems will become more user-friendly with one-touch processing. Where possible, processing will be online using the broadband mobile networks but systems should also be able to work offline to support remote areas in countries lacking infrastructure or to handle disruptions to service. Offline processing would later be replicated back to the host system. E¬-signatures will be the normal method.
The intermediaries mobile system suite will be two-way allowing receipt of industry news feeds, product information and rating parameters, company news, and updates to client portfolio status and diarised appointments. It should be possible for a company to introduce a new product one minute and have the remote sales force selling it moments later!
How To Get There?
Many companies have made inroads towards the aim of flexible customr-centric systems utilizing the Internet. But many find themselves constrained by their current IT infrastructure, and its lack of flexibility. These legacy systems, which have served the company so well over the years, are now reaching their limits. Often the issue is that the basic design is from a product era, not a customer era. They may have separate systems for different products or different departments. Data is entered more than once in different places and manually collated together again down the line for reporting. There may be no single upto-date view of the customer, probably not online. Introduction of new product offerings almost certainly requires programming changes with a lead-time of months, not days or minutes. The workflow is likely to be rigid requiring many manual controls.
To get out of their position, these companies need to make an important strategic IT change to avoid becoming a dinosaur of the Internet age. But it does not have to be a risky "big bang" approach - many companies are taking up phased migrations to new architecture. This brings short-term Wns and returns on investment balanced with a move to a medium-term goal. Such phased approaches, utilizing components, can help bring early improvements and early ROL They also benefit in being easier to implement from a change management point of view.
Future profits will come from having streamlined, efficient, customer-oriented companies which leverage technology. IT systems will become more open, integrated and transparent, driving faster and more efficient data exchange down the whole value chain. Companies that align themselves to the Internet and technology are most likely to be the winners, and the Internet will remain at the heart of future business.
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