The rock band The Who is known for asking the musical question:“Who Are You?” But it is the insurance industry (and fans of the TVshow CSI) that often echoes lead singer Roger Daltrey'snext line, “I really want to know.”

So, how well do insurers know the people buying their policies?Not as well as they would like, as evidenced by the increasingamount of money being spent on customer service solutions.

Forrester senior analyst Chad Mitchell believes spending oncustomer service projects ranks high among insurance carriers for2010. “If you ask whether they are spending on customer service,the answer would be yes,” he says. “On what section and how much,that differs depending on your definition of [customerservice].”

For example, Mitchell anticipates specific areas around Web 2.0will see increased spending, particularly in tools such as click tocall or click to chat. Another area of investment involvesimprovements in service for local agents.

In fact, in a recent survey of North American insurance ITspending conducted by Forrester, 21 percent listed implementing orexpanding Internet and e-commerce initiatives as critical withanother 31 percent listing it as a high priority.

The reason insurers need to know their customers better thanthey currently do, suggests Karen Pauli, research director forTowerGroup, is because of a lack of consolidated data. Siloedadministration capabilities don't give a 360-degree view of theconsumer.

“Some personal lines carriers do a better job of it becausethere's so much more automation around the personal lines,” shesays. “You can get better data.”

But it is not an investment only in customer relationshipmanagement solutions that will benefit insurers. Pauli believes anupside of the push for risk management and for data for regulatoryreporting purposes is, if those data initiatives are structuredcorrectly, companies can acquire more data on their customers. “Youleverage spending in those areas, and while you are at it, you getthe 360-degree view of your customer,” she says. “You have tostructure it right and get your data in order with robust datatools and data warehouses.”

KNOWING CUSTOMERS

Steve Peyton, a vice president with Insurance.com, indicates hiscompany has learned a great deal about the insurance-buying publicin the Internet age. “We've been collecting data since we began inbusiness [in the year 2000], and we've been able to slice outcustomer behavior in many ways–by product, by marketing channel, bystate, by demographic, and by profitability,” he says. “Weunderstand a great deal about our customers. But the one thing westill are searching for–and everyone is–is not necessarily who theyare or what they are doing; the Holy Grail is why they are doingit. Why are they shopping?”

What insurers have done to expand on this idea is to study thedata and find ways to use what they have learned to theiradvantage.

“We have identified roughly 150 touch points throughout [thecustomer] life cycle with us,” says Peyton. “We have put thesebehavioral metrics in place to understand how consumers areinteracting with us by segment, and we are creating a concept thatis basically the voice of the customer. We will be able to have anend-to-end look at customers and how we are treating themdifferently based on the segmentation and the behavioral data wehave in place.”

Insurance.com also values feedback from customers. “We recentlyrebranded the company with a new Web site,” says Peyton. “A lot ofthat was done through focus groups. We talked to our customers tofind the unique proposition Insur-
ance.com can bring to the marketplace and how we can tailor thatexperience so customers feel we are bringing that propositionforward, making sure customer experience resonates with what theywere telling us.”

The decisioning logic for the customers is based on the input,explains Peyton. “Coverage is an area where consumers can tell uswhat they want,” he says. “Based on those variables, we can give[customers] the lowest rates. Shopping for insurance isn'tsomething everyone wants to do. Most people view it as aburden. The fact we can bring all that to one place is powerful.They don't have to call GEICO; they don't have to call Progressive.They can come to us, and we can do the work for them. We make thatexperience as simple as possible.”

AGENCIES INVEST

Agencies themselves are investing a great deal in customerservice, often without support from carriers, points out Mitchell.“Local independent agents have almost identical functionality ofwhat a direct writer would have,” he says. “They are doing 24/7service, so you have that familiar human assistance, and they areoutsourcing after-hours service for e-mail, click to chat, and evenclick to call and extending their business hours into a 24/7capacity.”

Mainly, it is larger agencies making these investments,according to Mitchell, but smaller agencies are buying into aconsortium based on state or region.

Another trend for carriers and agents is investment in freesocial networking services or some form of Web 2.0 to improveservice.

During the Georgia floods earlier this year, Mitchell reportsagents and carriers were using Twitter to spread the word on roadclosings, weather updates, and traffic and road updates during thattwo- to three-week period. They also were providing links to getpeople in touch with Red Cross and other emergency assistance.

The key, points out Peyton, is for the customer experience tocontinue to evolve. That can be done by taking the data that isalready known about a potential customer and improving thecollection metrics from a customer perspective.

“We also need to get the customer feedback,” he says. “I gete-mail all the time from our call center. We have a top-down look,which is what we are able to derive by drilling into all these datapoints. With our 150 touch points, we set up our marketing programsand our application process to meet that.”

Part of the loop also is receiving feedback through agents ande-mail. “One thing we are doing with our new Web site is tocontinue to add those types of feedback, forms, and focus areaswithin our Web site so customers can give us feedback on theirexperience shopping in real time,” says Peyton.

Having the online technology the company uses from Chordiantgives Insur-ance.com an advantage, remarks Peyton. “Based onfeedback from customers or basic marketing practices, we are ableto ensure we have the most optimal experience in place,” he says.“It's never going to be one static application or process. The codefor us to crack is to make sure we are creating a superior shoppingexperience and a superior shopping destination for consumers.That's continually changing.”

THE LITTLE THINGS

Mitchell acknowledges insurers have struggled with some areas ofcustomer service, but he blames that on the business models used byindividual companies. He notes the direct writers often buildapplications based on open architecture and have invested incustomer data integration with a single platform to integratecustomer data and identify customers by a permanent uniqueidentifier.

“[Direct writers] always have been a step ahead when you thinkof cross-channel customer service,” he says.

Agent-based carriers often are saddled with legacy systems, andfixing those systems simply to improve customer service frequentlyinvolves a complete disruption.

“You would have to blow up the way things are currently done,”says Mitchell. “You try to get a quote online or submit a claim,but you get frustrated and get on a phone and basically start fromscratch. [Carriers] don't have a true customer-level ID. It's oneof those broken records. We've been talking a long while aboutintegrating data and integrating channels and reducing thecustomers' pain.”

Mitchell has seen investment this year in customer informationhubs, an open architecture platform for the internal call centerrep or the licensed agent. These hubs are middleware-typeapplications that sit on top of old legacy applications and pulltogether customer data to give the reps a workable platform and theability to serve customers better and reduce the amount of internalapplication processing that is needed.

A second area of investment involves call-center desktopsolutions, which Mitchell explains, are similar but notidentical.

“[Desktop solutions] don't have as broad a CRM functionality asthe customer information hub, but they allow you to repair what'swrong with the major issues such as channel integration, siloeddata, and poor customer experience,” he says. “If you see brandssuch as Nationwide and MetLife investing in those types ofsolutions, others will follow, and I think we'll see that in2010.”

DRIVING MORE BUSINESS

There is a huge imbalance in how insurers invest in a technologythat improves the prospect acquisition experience vs. retention andservice for existing customers, Mitchell contends. “The spendingdata and investment we've seen indicate the acquisition areacontinues to be the higher priority because it still is amarket-share battle,” he says. “When we look at marketing andcustomer service surveys, acquisition remains at the top.”