Transcript CEO Agenda

INSURANCE DAY IN BUCHAREST
Building effective CRM in Insurance
Bucharest, 16 October 2008
Copyright © 2008 Accenture. All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
About Accenture
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to help them become high-performance businesses
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revenues of $ 19.70 billion for the fiscal year ending 31 August 2007
 Accenture serves 87 of the Fortune Global 100, nearly two thirds of the
Fortune Global 500 and government agencies in 24 countries
 We are present in CEE since 1991
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Accenture’s structure
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High Tech
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Services
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Products
Resources
Management Consulting
• Customer Relationship Management
• Finance & Performance Management
• Talent & Organization Performance
• Strategy
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Systems Integration and Technology
•
•
•
•
•
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Enterprise Architecture
Integration
Enterprise Solutions
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•
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IT Strategy & Transformation
Microsoft Solutions & Mobile Solutions
Service-oriented Architecture
Research and Development
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Platforms
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Accenture presence in the CEER region
With 5.000+ people, we are one of the region’s leading business services providers and
are present since 1991 advising international and local financial institutions
Local Offices
RU
PL
CZ
Czech Republic
2000+
280
Slovakia
Poland
1000+
94
Hungary
Slovakia
1000+
64
Poland
Russia
320
400+
Hungary
100+
Romania
200+
UK
SK
HU
SL
CR
RO
SR BG
Total
4.700+
765 (*)
MA
(*) Combined with non-CEER consultants
working in the region, Accenture has at any
given time 5.000+ people in the area
Countries of CEER where
Accenture has offices
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Countries of CEER where
Accenture has no offices but
conducts projects
Accenture has unmatched consulting,
system integration and outsourcing
capabilities in the region, with
experience in a wide range of
assignments at Financial Institutions,
including:
–
Greenfield start-ups
–
M&A related work
–
Strategies for multi-industry financial groups
–
Complex transformations, SI&T work and
outsourcing
Next to a strong geographic footprint in
6 CEE countries, Accenture has also a
broad experience in conducting projects
in e.g. Bulgaria, Ukraine, Slovenia,
Croatia, Serbia, Macedonia
Other countries in Europe where
Accenture has offices
3
What we’re going to talk about today…
Topic
Section
The Insurance market in Romania is
experiencing rapid growth and has still
significant upside potential…
MARKET
… a new customer centric approach is
required to address the emerging Retail
segments…
CRM
… companies have started re-focusing
their organization models and are
delivering significant results.
CASE STUDIES
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4
Whilst experiencing extraordinary growth, the Romanian
insurance market remains significantly under penetrated
compared to rest of Europe
Non-Life GWP in Romania (EUR B)
1.58
1.27
0.93
2005
2006
2007
Life GWP in Romania (EUR M)
401.3
315.2
287.5
2005
2006
2007
Source: Romanian Insurance Supervision Commission
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World
Ranking
2 United Kingdom
4
Netherlands
7
Ireland
8
Switzerland
9
France
11
Belgium
12
Denmark
14
Portugal
15
Finland
19
Sweden
22
Germany
23
Italy
25
Austria
26
Slovenia
28
Spain
31
Norway
33
Cyprus
36
Poland
37 Czech Republic
38
Hungary
43
Croatia
44
Luxemburg
45
Slovakia
50
Ukraine
Bulgaria
51
56
Russia
67
Romania
MARKET
Premiums in % of GDP (2007)
15.7%
13.4%
11.6%
10.3%
10.3%
9.6%
8.9%
8.5%
8.4%
7.4%
6.6%
6.4%
5.8%
5.7%
5.2%
4.6%
4.2%
3.7%
3.7%
3.5%
3.3%
3.2%
3.1%
2.7%
2.7%
2.4%
1.8%
 Worldwide insurance premiums: USD 4,061 B in 2007
 Share of Romania in the world insurance market: 0.72%
 World insurance market penetration (premiums in % of GDP):
7.5% in 2007 while Romania’s is only 1.77%
Source: Swiss Re, Romanian Insurance Supervision Commission
5
While mature markets developed alternative channels like
bancassurance or direct channels, Romania is mainly relying on
traditional sale force, but “wind of change” is getting closer
MARKET
Non-Life channel distribution
25%
5%
6%
9,1%
35%
5%
5%
26%
25%
16%
28%
1%
Brokers
7%
70%
Romania
Others (e.g. direct
distribution)
Banks
Exclusive agents/
employees
54%
57%
40%
Austria
Poland
Spain
Life channel distribution
6%
4%
14%
17%
9,1%
5%
54%
7%
42%
4%
5%
Others (e.g. direct
distribution)
72%
14%
Banks
80%
Exclusive agents/
employees
40%
25%
Romania
Brokers
Austria
16%
Poland
 Tied (exclusive) agents remain
the main distribution channel for
both Life and Non-Life lines of
business
 Banks still do not represent a
major distribution channel for most
insurers, with the exception of the
Life insurance sector. Current
bancassurance partnerships are
generally non-exclusive
distribution partnerships; joint
product development being
expected only at a later stage
 Sales through independent
brokers and independent
networks are also growing in
importance
Spain
Source: Swiss Re Sigma Report No. 5/2007, Romanian Insurance Supervision Commission
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6
Motor (72%) and Traditional Life (64%) products continue to
dominate the Romanian Non-Life and the Life business,
respectively
MARKET
Product distribution (% of GWP)
Non-Life
2006
2007
Δ% 06-07
MTPL
26.8%
26.2%
-0.6 p.p.
Motor Other
40.6%
45.8 %
+5.2 p.p.
Fire & natural
forces
11.6%
11.3 %
-0.3 p.p.
Other
21 %
16,8 %
-4.2 p.p.
Life
2006
2007
Δ% 06-07
Class I
61.5 %
64.1 %
+2.6 p.p.
Unit Linked
36.6 %
33.7 %
-2.9 p.p.
1.9 %
2.3 %
+0.4 p.p.
Other
 Motor products (third party liability +
other) cumulate 72% of non-life
insurance market
 “Motor Other” insurance, with the
largest slice in the market portfolio,
followed a steady upward trend, in spite
of general market worries about
profitability
 Traditional life insurance (class I)
remains the largest segment of life
insurance market
 A significant part of the emerging
Romanian life insurance market is
represented by unit-linked policies, in
slight decline over the past year (34% at
the end of 2007, compared to 37% in
2006)
Source: Romanian Insurance Supervision Commission Annual Reports 2006-2007
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With the rise of Retail customers, insurers need to change
their mindset to address effectively the new segments
CRM
Mindset shift for insurers
From Corporate…
 Relationship with customer mainly via
Account Managers
 Specific heterogeneous customer data
captured depending on customer specific
profile, therefore little statistic data is
available
 Customized solutions offered to meet
complex customer needs
 Sale closing process based on direct
negotiation
 Specific KPIs for customer satisfaction
measurement
… to Retail
 Customer-insight driven
 Social demographic data used in addition
to data received from customer
 Standardized offer ruled by “simplicity”
approach and price sensitivity
 Corporate brand awareness using mass
market communication techniques
 Value based management (differentiation
based on the value of the customers)
 Customer is intermediated by exclusive
agents or other alternative distribution
channels
 Brokers as significant distribution channel
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8
Insurers face many challenges, from the need of building a single
customer view to setting up more complex capabilities such as
customer care management and profitability measurement
CRM
Challenges for Retail Customer Relationship Management in Insurance
Single Customer View
Customer interaction
Up selling
 The business nature of the insurance industry brings about a relatively low
degree of customer contact. Consequently, little behavioral and processing
data is available to gain a deep understanding of customer profitability and
needs. Therefore, analytical CRM is much more dependent on external data
enrichment
 Customer interaction is limited and often conducted in a negative
atmosphere due to claims discussions or redundant contacts caused by
decentralized customer databases. Improved customer care and added value
services decrease service costs and increase customer service quality with a
positive effect on retention
 In the insurance industry there is typically less up-selling due to the fact that
many products deal with life events. An end-customer for example on
average buys 1-2 life insurance contracts. While up-selling is limited, crossselling needs to expand the overall product portfolio
Distribution channel mix
 Tied agents and branches are the main distribution channel, however,
brokers and banks have growing importance in insurers’ distribution
channel mix. Insurers need to employ customer insight capabilities to
measure branch and agent potential and profitability in order to efficiently
allocate support resources
Intermediaries
 Insurers are distributing via several types of intermediaries. Customer
relationship management, therefore, needs to be transformed to manage
intermediaries effectively and maximize their profit while measuring
customer satisfaction for end-customers
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9
From our experience a holistic approach is required to design a
customer centric operating model – customer insight is not
enough
CRM
Accenture approach to customer centricity
What are customer needs,
preferences and expectations?
What is driving satisfaction?
Voice of the
customer
“What opportunities exist to better
differentiate ourselves in the
marketplace through the customer
experience we deliver?”
Segmentation
Model
Service
Model
How are others
operating?
What operational trends
will change the
competitive landscape?
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Customer Experience
Blueprint
“How should the customer
experience be defined to deliver
better customer satisfaction while
being operationally effective?”
Execution
Model
Internal
operational
effectiveness
Competitive
landscape
“What operational improvements can
be made to gain an operational
competitive advantage in the
marketplace?”
How effective and
efficient are our
operations?
Have we found the
right balance?
Legend
• Understanding current position
• “Driving future strategy”
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A customer centric operating model must maximize customer
satisfaction and loyalty delivering a flawless customer
experience
CRM
Customer centric operating model objectives
Every interaction with the customer follows a standard set of steps, each of which should be designed to:
 Enhance the customer’s satisfaction with the insurance company by meeting their basic needs and expectations
 Develop customer loyalty and advocacy by creating an emotional bond with the customer
The Advocacy / Satisfaction Curve
Customer Interaction Model
(agency interaction example)
Interactions should look to deliver the
hygiene factors of the customer
experience to grow customer satisfaction
Dissatisfied
Unconcerned
Customer Satisfaction
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Zone of
Delight
Interactions should look to deliver
a customer experience that
creates an emotional bond with
the customer in order to grow
advocacy
Neutral
Advocacy
Zone of
Indifference
Defection
Customer Advocacy
Zone of
Defection
Extremely Satisfied
11
In order to delight customers, organizations need to excel in
capabilities around client centricity by generating and applying
customer knowledge
CRM
Client Centricity Success Factors
Customer Insight
… knowledgeable about customer needs,
value and moments of truths
Customer Lifecycle
Management
… ability to identify key customer events
and to fulfill related needs
Experience Management
Delivery
… translation into superior customer
experience, surprise and delight across
delivery channels
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12
To take the appropriate actions based on your specific retention
problem Accenture has defined an effective and profitable
acquisition and retention engine
CRM
Best Practice Retention Model
 Our experience shows that
setting up a Customer
Retention Center within the
organization can significantly
help to improve retention
3. Tailored sales and service
blueprints for different
customer segments
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Technical pricing
Market
Marketprice
priceoptimisation
optimisation
Timing
Timing
Presentation
Campaign
Campaignmanagement
management
Retention
Retention
offer
offer
Customer
Customer
Proposition
Proposition
•
•
•
•
Differentiated
Differentiatedservice
servicedelivery
delivery
CrossCross- sell
sell prompts
prompts
At risk prompts
Outbound calling
• Onboarding
• Claims follow -up
• Save calls
• Staff incentivisation
incentivisation
Target
Target
Customers
Customers
Sales &
&
Sales
Service
Service
Customer Strategy
•
•
•
•
•
Technical
Technical pricing
pricing
Market
Marketprice
priceoptimisation
optimisation
Channel
Presentation
Campaign
Campaignmanagement
management
Organisational focus on retention
2. Tailored customer
propositions and targeted
acquisition and retention
offers for different customer
segments
•
•
•
•
•
• Brand
Features
• Marketing
Benefits
Exclusions • Channel
Service
Marketing
Marketingmix
mixoptimisation
optimisation
•
•
•
•
•
Acquisition
Acquisition
Offer
Offer
1. Insight driven customer
segmentation driving market
and customer strategy,
including customer analytics
to develop churn prediction
and propensity models
Market analysis
Strategic market segmentation
Needs/Attitudes segmentation
Customer Value Analysis
Market Strategy
Organisational focus on retention
 Additional actions include:
•
•
••
••
• Risk based segmentation
• Behavioural segmentation – Propensity
propensity modelling
modelling
• • Behavioural
Acquisition segmentation
target strategy  Churn modelling
• • Acquisition
Retention target
target strategy
strategy
• Retention target strategy
13
Which levers to address customer needs and the efficiency /
profitability objectives of the Company?
CASE STUDIES
Characteristics and needs of the Customer Base
Retail
Characteristics / Issues
Needs
 Few contacts and
primarily for
administrative purposes
 Insurance needs that are
simple and evolving
according to Customer
Life Cycle
 Low levels of satisfaction
 Low customer loyalty
and increased price
sensitivity
Customers
FOCUS OF CASE STUDIES
Corporate
 Complexity of needs
increasing along with
size of business
 Heterogeneous
characteristics
dependant on industry
sector
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 Complex needs to be
addressed with tailor made
offers, differentiated coverages
by sector (i.e. Product Liability,
Transportation, …) and one-toone advisory relationships
14
The approach: review the offering and service model defining a
lean and “customer need-based” catalog
CASE STUDY #1
Leading Italian Insurance Company
Innovation
1
Dynamic response to
integrated Customer needs
2
3
New way to reach
Customers (many more
effective contacts)
Simplicity and
standardization for
modularity
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New and few
“easily scalable”
products
New sales and
services
approach
New operational
processes
Goals
 Complete offering adapting to dynamic
Customer Life Cycle needs
 Coverage integration:
 P&C - P&C
 P&C - Life
 Modular product structure: flexibility during
the entire Customer Life Cycle (CLC)
 Customer base development (cross and up
selling) even through transformation of
administrative processes into sale
opportunities
 Effective communication to seize every
opportunity
 Operational simplicity and versatility in
order to facilitate sales and after sales
activities
15
New and few “easily scalable” products…
CASE STUDY #1
“Need-Centric” segmentation
ILLUSTRATIVE
Product concept definition
…
Profile 2
Basic Offer
Customer needs
Profile 1
Life Quality
FIRE
Development and
consolidation
ANNUAL
LIABILITY PREMIUM
Coverages responding
to the most “intensive
needs”
Safety
Basic needs
Beginner
Builders
Careers
Optional Coverages
Enjoyers
Life Cycle Stages
Most intensive needs
Customer
segmentation and
needs analysis
Coverage identification
to meet Customer
heterogeneous needs
HEALTH
Optional coverages to
define a custom
“Insurance project”
THEFT
FUND
Products structure (modular contents) able to guarantee flexibility during the Customer Life Cycle
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… offered with a new sales and services approach
CASE STUDY #1
First “need-focused” product results
“Insurance coverage need”
New commercial approach
Leading Italian Insurance Company
ILLUSTRATIVE
2nd Proposal: increasing
assured capital
1st Proposal: adding
Family Liability
THEFT
House protection
product
Average premium
(index numbers; %)
Multi-coverage policies
(%)
+66%
+45%
166
48%
100
LIABILITY
33%
3
THEFT
FIRE
Year 1
Year 2
Year 1
Year 2
2
Operational expenses
(index numbers; %)
1
“Customer
Life Stages”
30 years old:
first house
32 years old:
marriage
-20%
100
80
35 years old:
career advancement
Year 1
Year 2
Annual payments
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17
Creation of a Customer Services Center was the answer from the
Company to the growing need for better Customer Services and
excessive dispersion of Customer Service activities
Re-modeling Customer Services
CASE STUDY #2
Leading Polish Insurance Company
Deteriorating Customer
satisfaction
Increasing Customer Base
Disintegration of Customer
Services activities
Customer Services Center project
Project scope – 4 perspectives
Business Need
 Creation of a single
Customer Service entity
for the whole Group
 Teams and roles
description
 Extending Customer
Service capacities
 Legal and tax
model
 Discharging Sales force
from providing secondary
Customer Service activities
 Customer satisfaction
improvement
 HR policies regarding
CSC employees
 Enabling standardization,
monitoring and
evaluation of relevant
processes
 Organization size
estimation
People
Organization
 Description of
processes
 Assigning
responsibilities
Proces-  Best practice and
ses
methodology
description
Technology
 Solution selection
Expected Results
 Harmonization with
other departments
 Increase in Customer
Services effectiveness
 Creation of unified
Customer records
 Ability to serve growing
customer base
 Sales force more focused
on sales activities
 Implementation plan
preparation
 Verification of functional
requirements
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18
The new Customer Service model consists of 3 levels of Help
Desks, each dealing with issues with a particular degree of
complexity
Customer Service Center – proposed solution
Channels
CASE STUDY #2
Leading Polish Insurance Company
Customer Services Center
Product factories
Telephone
Mail
Fax
E-mail
Customers
Branch
Agents
IVR
Internet
Help Desk
Level 1
 Employees: with
general knowledge
 Enquiries:
common, not
requiring particular
product or process
expertise
Help Desk
Level 2
 Employees:
qualified, process
and product
specialists
Help Desk
Level 3
 Employees:
product specialists
 Enquiries: nonstandard, complex
 Enquiries:
complex and/or
rare
SMS
Assumptions
– Majority of inquiries resolved in the Help Desk Level 1
– Introducing specialization in terms of processes and products
– Customer service teams divided into 3 areas: P&L products, life products and claims
– Using the telephone channel do collect inquiries/orders
– Readiness to outsource secondary activities (e.g. scanning, archivization)
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19
Thank you!
From today’s presenters…
 Andreea Niculae
Accenture Romania – Bucharest Office
[email protected]
 Giuseppe D’Elia
Accenture Italy – Turin Office
[email protected]
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Question & Answers
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