Sorry, but There Is No Magic Bullet

Tech firms routinely over-promise and under-deliver, but there is no magic bullet. Insurers must always do the hard work themselves.

I was reading an article recently in an insurance technology magazine and was somewhat startled to see that an insurance executive said he was looking to customer house-holding (i.e., ability to pull together all of the insurer's customers living at the same address) to enable more sales. I agree that house-holding is important to increased sales (and better customer service, as well). I was startled because when I was at John Hancock in the mid-1980s we were challenged to come up with a house-holding solution. We wanted to be able to drive further sales, of course, but we also wanted to identify how many customers had more than one of our insurance products. I would have assumed that every insurance company did customer house-holding today (three decades later) just as every insurer is geo-coding every address in its core administration system, compensation system, financial system and other system records. (Well, I'm writing this on a Friday, so I allow myself to daydream a bit.) But the insurance executive's comment led to my thinking about... No Magic Bullet I have found through my decades of being in the insurance industry that insurers tend to expect technology vendors to deliver magic bullets. (For context, I am from the marketing/market research side of the insurance industry... not the technology side.) My clearest memory of this belief in magic bullets is from my time in the late 1990s at the META Group delving into customer relationship management (CRM). Salespeople told me that insurers considered "CRM" to be a dirty word. Insurers were upset that technology vendors over-promised and under-delivered about CRM's benefits. Putting aside that over-promising and under-delivering is what technology vendors do as a matter of course, I believe that a significant part of the blame concerning CRM rests with the insurers themselves. A Lot of Hard Work CRM requires a lot of hard work. This remains true whether it was the CRM solutions of decades ago or the current cloud instantiations. And I mean a lot of hard work by the insurers themselves. Insurers must hold themselves responsible for:
  • the cleanliness of the data that flows into and is stored in their core administration systems, compensation systems and other operational systems. Not the technology vendors... the insurers.
  • creating (and updating) authorization protocols for accessing, editing/changing and deleting customer data.
  • identifying the "right" type of data to store and use in CRM systems. I'm thinking here of pictures, sound (phone calls) and video streams whether from customer- or insurer-initiated contact or insurers monitoring their customers' social media sites for information that can improve customer service, product development or target marketing. Insurers should also get customer opt-in to collect and use customers' social media data.
I could go on with the hard work involved with CRM, but there are many examples of other solutions that insurers should be using and that involve hard work: predictive analytics, big data, interactive visualization and geographic information systems (GIS), to name a few. My Point Is.... My point is that with every solution that technology vendors bring to insurers with their promises of "saving time," "reducing costs," "creating a competitive edge" or "improving customer experience," there is significant hard work involved ... that the insurers will have to accomplish themselves. There are no magic bullets ........................ Or am I off on a limb yet again? What do you think ... whether you are an insurer or a technology vendor supporting insurers? And how do you resolve these challenges?

Barry Rabkin

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Barry Rabkin

Barry Rabkin is a technology-focused insurance industry analyst. His research focuses on areas where current and emerging technology affects insurance commerce, markets, customers and channels. He has been involved with the insurance industry for more than 35 years.


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