For insurance organizations seeking to move from product to customer focus, there is one important thing to keep in mind: It’s all about the data.
Let me explain.
For much of its history, the insurance industry has covered customers it only partly understood, making do with the limited information it could reasonably get. In some cases, data might be inaccurate, or important details might be missing. Chasing down the information takes time and might still provide only a sense of the customer, but not the full picture. Through careful nurturing, life events, cross selling and handling claims, an insurer might have many relationships with the customer, each providing a different view of the customer and sometimes even offering contradictory information.
In some cases the data problems are apparent. For example, a claims adjustor might record a 60,000-mile odometer reading on a two-year old car that had been underwritten based on it being driven 12,000 miles a year instead of the apparent 30,000. Sometimes it’s a little more subtle, such as customers who change their business and their risk profile midyear, branching out into new, more hazardous operations that should affect premium.
Working, as we do in an age where data is king, the amount of information and data points available on customers and potential customers is staggering. Like other financial services, retailers and other industries, insurance companies have the potential to harness that information to get a true picture of the customer. And for existing customers, insurers often have useful customer data residing in different departments, including underwriting, claims, loss control and risk management. The emphasis used to be on building a perfect product and pushing it out to the customer. Now it’s about building a 360-degree view of that customer and their needs, then matching your strengths with those needs and the needs of those in the ecosystem of the customer. This way you can sell the right home, auto, life, annuity or business products to customers, and their extended family, friends and business associates – in short to everyone in their networks. Especially important, you now can offer the right product to the right person at the right time.
That is how you move from a product-centric to a customer-centric organization. But it is also where the organization faces some interesting challenges.
Enterprise architecture (EA) was a radical idea when it was introduced in the late 1980s. It promised the end of silos and the beginning of a holistic way to manage the technology needs of an organization, all centered on automating the creation, management and/or distribution of the product. Today, this enlightened approach to modern business has shifted emphasis to meet the new demands of a world market filled with disruptive technology. In fact, strong businesses are looking to enterprise architecture to help them provide their core customers with products they and their partners have developed, all tailored to meet a specific customer’s needs.
Moving to a more modern enterprise architecture requires a complex assessment of where the organization sits on an EA maturity scale, careful goal setting and a tight plan to get there. Typically, the new EA structure will have a somewhat traditional legacy layer of core company systems on top of an evolutionary new-generation sales layer with multiple channels to strengthen relationships with customers. These layers will sit within an innovative layer of digital components that provides better customer insights, customer experiences and new streamlined processes.
Organizations also must share with other organizations through an Application Programming Interfaces (API) strategy together with microservices. The API strategy essentially opens up the code modules, applications and backend IT systems in a controlled manner by specifying how the components interact and how data and content can be shared. This kind of strategy can enable different parts of the organization to share data, but it also can enable content to be shared with business partners and with customers, furthering the organization’s move toward customer centricity.
Microservices are well suited for API, and can be easily used as a whole, self-contained module. Working with microservices vs. traditional programs is essentially the difference between constructing a building with Lego pieces that immediately fit nicely together, vs. constructing with lathe-and-plaster walls and then trying to integrate them. Businesses will be doing more with partners outside their four walls, so micro services are ideal. If, for example, I’m an auto dealer who is expanding my ecosystem, I might also want to sell insurance along with the car and the financing. While the customer sits in my office, I can plug in a group of insurance services from my partner company, obtain an insurance quote just as I now do with auto financing and have my satisfied customer leave knowing everything will be ready when he returns to pick up the car.
Ultimately, long-term success will depend on understanding every customer and anticipating and providing for their needs, then doing it over and over again with ever-expanding networks of satisfied customers. The customer – and the 360-degree view of them – is king.