I don't need to tell you that consumers are nuts. They demand better customer service, but complain about their privacy if you try to collect the information you need to give that service.
A good number of these customers, I'm sure, have no qualms about filling out warranty registration cards for their new CD player-the ones that ask which hobbies they're into and what kind of music they like. And many probably sign up for those supermarket discount cards, happily giving away disturbingly personal information. ("Mr. Jones, we've noticed you've bought four tubes of Preparation H this past month. Here's a coupon for new Charmin with Aloe.")
But the people who sign over details of their grocery-shopping trips often balk when it comes to financial and medical information. There is certainly a nugget of reasonable paranoia here; social stigmas and employment discrimination are real. But the aversion to insurance and financial information collection goes beyond that-and, as you know, it finally reached the point of becoming law: Gramm-Leach-Bliley or GLB.
And then you have the fickleness of those same consumers who are making personal-lines products more and more into commodities. With their seeming willingness to change carriers at the drop of a hat (a perception that may or may not be true), those carriers have to pull out all the stops to convince those customers to stay. Better customer service is arguably the best way to do that, but how can you accomplish that without collecting data on the customers you need to serve? All owners of Toyota Camrys do not have the same needs. Nor does everyone born in 1956, or everyone who lives in ZIP Code 11355. It is where these data points converge that the definition and needs of individual customers are made clear. The more data points, the better the picture of the customer.
Aye, there's the rub. Feeling crippled (or at least hampered) by GLB, it's easy to understand why insurers might throw up their collective hands in frustration. But the law need not be a monkey in the works or an albatross around anyone's neck (although it remains the elephant in the corner). There are ways-legal ways-to continue to collect and mine customer data to deliver the kind of service those customers want. In "The Letter of the Law" (page 24), Michael Voelker shows you how.
But besides being fickle, consumer are also thieves. No, not all of them, but enough to do $54 billion worth of fraud damage to the industry each year. Luckily, the same kinds of data-mining smarts that can help with customer service can help root out fraud by detecting patterns in claims, finding connections between claimants, and giving your SIU a head start. Check out page 36.
I hope you're enjoying our new columns and new look. Last month we got more letters of praise than ever –thanks.
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