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Channels Work Together toward the Same Goal
August 1, 2008An obvious key to success in the insurance business is selling policies, and the more ways an insurer can sell those policies, the better. It’s no secret that the Internet is moving quickly into consumers’ day-to-day activities—enabling clothing purchases online, banking online and, increasingly, insurance policy purchases online. But there are still those consumers who conduct transactions through the traditional routes — the agent or even via phone.
As pressure mounts for insurers to increase business, they are starting to take notice of the challenges behind creating and managing many distribution channels and to ensure they’re all emitting the same service and message.
In order to address the challenges behind having so many distribution channels, insurers are implementing multi-channel integration (MCI) systems, according to a Gartner study conducted with 50 U.S.-based life and P&C insurers in the third quarter of 2007. The report finds that carriers are making headway with their channel integration projects, including developing enterprise strategies and making IT investments in business process management and data management. Investments are expected to increase during the next 24 months among U.S. insurers, as well as insurers in other regions, says Gartner.
Allstate Insurance Co. started down this road in 2000 with its multi-access strategy, which aims to integrate its network of Allstate agents with customer call centers and the Internet. “We have enhanced the channels to make consumer travel between them more fluid,” says Patricia Coffey, VP of distribution, marketing and process solutions at Northbrook, Ill.-based Allstate Insurance Co. “We want to provide a superior customer experience, and being multi-channel is essential.”
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Patricia Coffey |
Multi-channel strategies, however, may be lacking overall among life and P&C insurers, according to the Gartner study. But it appears that insurers investing in MCI are making the appropriate investments to build the necessary foundation. Rather than focusing solely on one activity, life and P&C insurers are taking a more well-rounded view of MCI in order to share data across channels, ensure all channels use the same core systems, centralize business rules across the channels, share content/documents across the channels and invest in management of cross-channel business processes.
MCI may be more important than ever due to the development of different types of distribution channels, according to Kimberly Harris-Ferrante, research VP at Stamford, Conn.-based Gartner Inc. Insurers are having conversations about creating new distribution channels—affinity groups, Internet, etc.
A BIG INVESTMENT
Integration requires a heavy investment because many of these channels may be new and threatening to existing channels, or some of the channels may be considered more high-tech. “For example, the Internet was more tech savvy than some of the technologies the agencies use,” says Harris-Ferrante. “Instead of trying to take these legacy systems and open them up to do things such as online quoting and customer self-service, they had to completely redo the technology and, at certain times, buy new technology to replicate their processes in older channels just because there were technology limitations. Where we’ve talked about channel strategy in the past couple years, it’s been more around creating channel silos and offering more channel options to customers.”
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