Tag Archives: synergy

The Silos Are Coming Down

While I’ve heard many too many empty promises of corporate synergies over the years, I’ve learned that one form of cross-selling really does work: “Do you want fries with that?”

So, I’ve been waiting (and hoping) for insurers to find ways to achieve similar sorts of easy, intuitive crossover sales.

There are already a few combo meal sorts of offerings that show promise — e.g., Tesla bundling auto insurance with its cars, or Comcast selling insurance into homes that are tethered to it via coaxial cable — but my ears really perked up last week when stories surfaced about Walmart forming an insurance agency.

It just makes sense. With 5,000 outlets in the U.S. alone and 265 million customers worldwide, Walmart has a target-rich environment for insurance sales. Many, in fact, are visiting Walmart to pick up pharmaceuticals or to buy other items related to their healthcare, so health insurance is on their minds. Walmart, given its relentless efficiency, could easily develop insurance products that undercut competitors’ prices and would have the credibility with customers to sell boatloads of those products.

In fact, Walmart wouldn’t even have to generate the sorts of profit margins that competitors do, because a tighter relationship with customers on their health needs would bring them into stores more often and let Walmart generate profits on groceries, home goods and all sorts of other products. (Regulators will surely weigh in on what constitutes fair competition.)

Walmart signaled that it will begin with a niche, Medicare Advantage, that plays to its price-sensitive demographic. In fact, through a $4 generic drug program, Walmart often provides pharmaceuticals to customers for less than their Medicare Advantage insurance would charge them, so Walmart has already made inroads.

In research I’ve done with Chunka Mui on major strategic mistakes, the kind of adjacency move that Walmart is making raises red flags, because retailing and health insurance have little in common. But Walmart has done all the right preparation, having spent more than 15 years testing the waters in health care and insurance — hosting insurance agents onsite, setting up joint ventures with insurers, putting clinics in some stores, buying and deploying technology to help customers manage medications, experimenting with telemedicine and much more.

Walmart is also starting small with its agency, advertising for employees and building an internal capability, rather than spending a bunch of money on a splashy acquisition or two. (Sears made that mistake in the early 1980s when it bought Coldwell Banker and Dean Witter, only to be distracted by integration issues and take its eye off the ball in its core business, which it ceded to… Walmart.) So, I see no particular obstacles for Walmart.

In fact, health insurance is such a mess that many customers would love an outsider’s approach, especially if the outsider is, like Walmart, known for being straightforward and inexpensive.

Given the battle to the death between Walmart and Amazon, it’s reasonable to think that Amazon might now accelerate whatever plans it has for health insurance. It might behoove insurers to get ready, and even to go on the offensive, looking for partners outside the industry rather than waiting for them to define an opportunity in insurance.

Insurers won’t be pushing fries and, alas, can’t offer dollar meals or dollar anythings, but there are lots of healthy options that can be offered and sold easily if insurers get creative about how to bundle their products with partners’.

Stay safe.

Paul

P.S. Here are the six articles I’d like to highlight from the past week:

6 Life, Health Trends in the Pandemic

Life and health carriers are responding with new protection products and services.

Reigniting Growth in U.S. Life Insurance

Agile response to COVID-19 bodes well for returning the life insurance sector to long-term growth and wider financial protection in society.

COVID-19 Highlights Gaps, Opportunities

The pandemic and the response to it have highlighted significant gaps in industry offerings that are yet to be resolved.

Another Reason for Insurers to Embrace AI

AI alerts have played and continue to play a critical role in detecting and controlling future outbreaks like COVID-19.

Wildfire Season Off to Perilous Start

Fires can create their own weather: Smoke-infused thunderstorms produce lightning that starts new fires and can lead to fire tornadoes.

Lasting Impact of Plaid’s Innovation

The temptation to try to own all the value at every layer of a solution can be fatal, and is something Plaid brilliantly avoided.

The 3 Ways to Customer Retention

While life insurance used to be one of many Americans’ most important financial assets, a host of changes—economic, social and cultural—have caused it to become a lower priority. Customers’ top two reasons: that life insurance is too expensive, and that they have other financial priorities.

Given the difficulty of acquiring new customers, it is imperative for carriers to focus on retaining existing ones. In fact, small increases in retention can translate to large revenue growth, and the payoff can be substantial.

Reaping the benefits of a thoughtful customer retention program requires a long-term vision. Carriers should consider the potential lifetime value of a customer (and the products he is likely to buy) that will allow a carrier to increase profitability—today and in the future.

LexisNexis recommends three steps on the road to an effective customer retention program:

  • Acquire customers with retention in mind
  • Develop a customer-focused communications agenda
  • Understand the customer experience
  1. Acquire customers with retention in mind

Effective customer retention begins with targeted acquisition. Carriers must understand their own capabilities, risk appetite and services and acquire customers that they can serve well. The better a customer aligns with a carrier’s profile and preferred market spaces, the greater the likelihood she will stay.

Segmentation and predictive models are key. Solutions available in the market include:

  • Risk classification models to help carriers optimize leads and identify the most profitable prospects.
  • Lookalike models to help carriers understand the characteristics of their best customers and attract similar prospects.
  • Lifetime value models to identify the potential long-term return of a prospect—enabling a carrier to identify prospects with the greatest future potential for growth and loyalty.
  • Prospect persistency to help predict whether a prospect will lapse within a given time.

In short, successful retention efforts begin well before a customer is acquired.

  1. Develop a customer-focused communications agenda

Having done the legwork to acquire a suitable customer, carriers should ensure they have a strategy for strengthening the relationship. Each customer touch point is an opportunity to do so, and these touch points should be outlined in a customer-focused agenda and communication plan.

The customer agenda defines customer touch points, such as:

  • Onboarding process. The onboarding process can set the tone for the carrier-customer relationship. For example, customers might receive a welcome note with contact information in case of questions; where to learn more about protecting their life, health and other assets; how to set up a holistic financial protection plan; and more. Carriers can tailor these communications for individuals and reinforce the company’s brand, nurturing a conversation from the very start. These communications are usually separate from a carrier’s requirement to deliver legal policy documents, but this is not to say that the delivery of legally required documents has to be stiff or un-tailored. Every step of the process is an opportunity to nurture.
  • Annual reviews. Many customers are either unaware of or confused about coverage options, so annual reviews are an ideal opportunity for the carrier to stay in touch with each customer and offer risk management advice. Annual reviews also help position the carrier as an adviser, not just a service provider. In addition, carrier support for annual reviews can help a sales team stay on top of its customers’ life changes—while also positioning each salesperson as a reliable and trusted adviser.
  • Cross-selling opportunities. Based on their understanding of each customer, carriers can identify opportunities to cross-sell additional products, such as an annuity or supplemental health product. Carriers should also consider cross- or multi-product purchases within a household—for example, for an insured’s spouse, child or parent.
  • Payment reminders and opportunities for automatic payments. Payment and premium reminder notices can trigger customers to lapse or switch providers, so managing these communications is critical to retaining customers. In addition, automatic payments can make paying life insurance premiums effortless for customers, minimizing the chance that they will lapse.

Carriers should also ensure that they maintain continuity across all channels, synchronizing their market messages across all digital and traditional communications channels including websites, print and radio ads, social media, email and direct mail.

Traditionally, carriers have minimized communications with their customers, believing that reminders about life insurance are a reminder of that customer’s mortality as well as a budgetary expense. As such, retention strategies were more focused on conserving customers who had already decided to cancel their policies, typically by offering less coverage and lower premiums.

  1. Understand the customer experience

The customer agenda outlines when and how a carrier will communicate with its customers but does not address an individual customer’s unique needs. To better understand their customers and identify these needs, carriers should supplement their internal data with external data sources and predictive models. This is one area where the life industry has much experience and has often excelled, but carriers have not been consistent in their pursuit of data for deeper customer insights. Exacerbating the issue, new sales have been harder to win, prompting carriers to focus heavily on acquisition—to the detriment of understanding current customers’ needs.

The Internet and social media channels have changed the way that customers make purchases—and insurance is no exception. Rather than turn to a carrier or agent for advice, many customers now begin with online research. This research may include the carrier’s website, as well as comparison sites and online reviews. Increasingly, it also includes social media, which allows positive and negative experiences to be reported and shared. In general, these channels limit a carrier’s control over its brand and the customer experience.

To better understand each customer’s individual needs, and how he experiences a relationship with the carrier and agent, carriers can work with a data partner to:

  • Tap into third-party data sources to gain insight on a customer’s life changes. External data can help carriers identify customers whose insurance needs might change: For example, people often reevaluate their finances when they move or purchase a new home. Armed with up-to-date mover and homeowner information, carriers and agents can contact customers and advise them on ways to mitigate risk.
  • Verify whether an insured has appropriate coverage. Customers may experience life changes and not think to update their life insurance provider. Working with a data partner, carriers can obtain up-to-date, accurate and validated wealth and asset information—to be certain each insured has appropriate coverage and affordable premiums for their means, and to offer alternatives if otherwise.
  • Use models to determine the risk of a customer leaving. Market solutions are available that can help carriers predict the risk of a client leaving, so that carriers can take action before she leaves.

With data, analytics and predictive models, carriers can identify customers with changing insurance needs and life events and respond appropriately. An effective response will address a customer’s specific needs—and, in an ideal situation, will deliver a tailored message at the right time. In addition, market solutions can enable carriers to establish event alerts that deliver automatic messages at the right time. For example, a carrier could establish an automated event notification when customers apply for a new mortgage. An automated process could send each customer a note outlining tips for buying a home, while reinforcing the value of the life insurance the customer already holds, in helping to protect the home for the family. The communication would also remind customers to update their life insurance policy within a suggested time of a new home purchase to ensure they have adequate coverage.

Automation ensures that messages are delivered efficiently, effectively and through the appropriate channel. It can also support a more cooperative carrier-agent relationship, as carriers can direct customer retention efforts while still empowering agents to connect with customers. In addition, automation better assures carriers that they are providing a consistent experience. Following each automated message, the carrier or agent should follow up with the customer to reinforce the 1:1 messaging and strengthen the relationship.

In a continued low-interest rate environment, customer retention must be a priority for a carrier to thrive. Customer acquisition encompasses a host of carrier activities, from advertising and marketing, to on-boarding, underwriting and policy issue. In life insurance, it can take seven to eight years to recoup the acquisition costs for one customer. Bain has estimated that it is six to seven times more costly to acquire a new customer than to retain an existing one.

3 Steps Toward Better Meetings

How many meetings did you attend last week that lacked a specific agenda, started late and then ended late? How often did you attend a meeting without knowing why you were even there? How many meetings actually resulted in a new idea or significant decision?

With about 11 million business meetings occurring each day, one thing is clear: Meetings are a mainstay of business culture. When they are conducted effectively, they inspire and ignite innovation and lead to higher-performing teams and a stronger bottom line. When they are ineffective and irrelevant, they plague all of us with the notion that this time together was wasteful, costly and inefficient.

Too many meetings fail to generate any meaningful return on the investment of our time and energy. And they undermine our productivity. Our meeting-intensive culture forces people to complete their work in the margins of their day-early in the morning and late at night-hurting their health, motivation and work-life balance.

Something has to give.

It is time for better meetings. It is time for a meeting revolution.

Start the revolution by questioning the value of each meeting you attend, by preparing for your meetings and by ensuring that the right people, and only the right people, are invited.

1. QUESTION THE VALUE OF EACH AND EVERY MEETING YOU ATTEND

Instead of automatically accepting the next meeting request, pause and consider the meeting’s return on investment for you. Ask yourself:

  • Will this meeting assist me in achieving my goals?
  • How does the purpose of the meeting align with the company’s strategic priorities?
  • What contribution can I make in the meeting?
  • Will anyone even notice if I’m not present?
  • Will this meeting be energizing, or will it suck the life right out of me?
  • Will this meeting be a rehash of the last five meetings I attended?
  • Is attending this meeting the highest and best use of my time right now?
  • Remember, every time you say yes to one thing, you are saying no to something else.

2. SUCCESS AND EFFECTIVENESS DEPEND ON YOUR PLANNING

As you prepare for your next meeting, ask yourself the following questions:

  • Why do we need to meet?
  • What is the purpose of the meeting?
  • Is this an informational, decision-making, problem-solving, brainstorming, team-building or instructional/skill-building meeting? Or a combination of a few of these?
  • What is the outcome I want to achieve as a result of this meeting?
  • Is there an alternative format I can use to achieve the outcome?
  • If a meeting is essential, what is the ideal meeting format to achieve the meeting outcomes-an in-person meeting, a virtual meeting or a combination of the two?
  • Who needs to attend the meeting?
  • What information do I need from the attendees?
  • What do the attendees need to know or complete in advance of the meeting to achieve the outcome?
  • What expectations do I have for the meeting attendees regarding preparation and participation? How will I communicate these expectations?
  • What is the ideal length of the meeting to accomplish the stated purpose of the meeting?

Use your answers to guide you in planning and preparing to have better meetings.

3. INVITE THE RIGHT PEOPLE AND ONLY THE RIGHT PEOPLE

To think about who to invite to your meeting, start by recognizing that there are four types of meeting attendees: the decision maker, the influencer, the resource person and the executer.

  • The decision maker is the primary authority.
  • The influencer has the pull and network within the organization to advocate and popularize meeting decisions and initiatives.
  • The resource person has specific knowledge, skills and expertise needed to inform the decisions and create plans for executing those decisions.
  • The executer has the knowledge, skills, resources and authority to successfully complete the work resulting from the meeting.

An ideal meeting has each of these types in attendance. Of course, one person can represent multiple roles, and more than one representative of a specific role may be required. For example, you may need three executers to complete a complex project discussed during the meeting.

To determine who really needs to attend the meeting, ask yourself:

  • What is the meeting outcome?
  • Who in the organization must be present to achieve the outcome?
  • Who is the decision maker?
  • Who is the influencer?
  • Who is the resource person?
  • Who is the executer?
  • If there are people who will not be invited to the meeting but who have been invited to similar meetings in the past, how will I communicate my rationale for excluding them?

Without the right people in the meeting, nothing will be accomplished, and everyone’s time will be wasted. To have better meetings, invite the right people and only the right people.

A decision maker is not necessary to start a meeting revolution. A meeting revolution starts with one person choosing to do something differently and then communicating with colleagues about why she has chosen a different approach.

Thirty-seven percent of employee time is spent in meetings. So, when you choose to lead a meeting revolution, you are not only ensuring that this investment of time and energy generates a significant return on investment, you’re also giving your team time back to do the work they’re good at, the work they’re hired to do and the work that will grow the business.

What can do you right now?

  • Here’s a game-changing question for you: Are you a planner, prioritizer, arranger or visualizer? Find out your productivity style in less than 10 minutes; take my free productivity style assessment.
  • Want to take it to the next level? Share the assessment with your team, then start a conversation about your respective productivity styles and what you each need to work well.

Share your thoughts on how these strategies worked for you! Please leave a comment on this post.

This article originally appeared on fast company.com.

‘Core Transformation’ May Not Be Enough

In the 1920s, Hollywood had a pretty good grasp of what it took to be a leading lady. She had to be able to use exaggerated gestures and facial expressions to convey what was going on without the benefit of sound, and she had to look attractive onscreen. Nobody cared what her voice sounded like – and then came the talkies.

Suddenly, the established actors and actresses had to learn brand new skills and adapt to a new paradigm, because no movie studio was going to continue putting out silent movies when the other studios were putting out talkies. Some stars did well, like Mary Pickford, a silent film star who won an Oscar for her first speaking role. And then there were actresses like Jean Hagen, playing Lina Lamont in “Singing in the Rain,” who sounded like someone stepping on a rubber ducky that had a head cold. Even for the film stars who successfully made the transition, moving from silent movies to talkies was a challenge unlike anything faced before.

Every industry encounters these moments, although some are not as obvious as the talkie revolution. The good news is that insurers, as a whole, are starting to execute on their transformation paths. Customer service is improving, business models are morphing, products are becoming more sophisticated and the core systems that support the full breadth of the company’s business are changing – and all these changes continue to accelerate. As I mentioned in our last core blog, SMA’s recent research on policy administration systems found that 94% of insurers require robust configuration capabilities from a new PAS, because these capabilities provide the foundation for the ability to increase speed to market and speed to service, and solution providers have gotten the message. There are more and more systems on the market that are adopting these dynamic configuration capabilities. In fact, they have now become table stakes when core systems are replaced.

But there needs to be a transformation of the full core, including people and processes – not simply a system replacement project. The full core transformation includes modern policy, billing and claims systems, advancing business capabilities and an adaptive and agile organization.

Among the important ingredients for organizational transformation are the ability to adjust to required new skills, to determine where these skills will be located in the organization and to decide how the delivery of product changes will occur. For example, will you rely on the technology alone to create the differentiation, or will you adjust the organization and the skills? The new configuration capabilities can be used by people who have been trained as business analysts – and these resources are often in short supply at most companies. I have experienced demos where I hear that the configuration capabilities can be used by the business professionals to expedite product deployment. The assumption is that there are resources available in the business to perform this work. In many cases, the reality is that the business does not have the skills, processes or time to perform this work.

Often, the technical areas do have the process and some of the necessary resources, but, if the work shifts to the technical side of the business, then the IT pipeline is just being filled with the same volume of change requests that existed in the past. This is the Gordian knot that must be worked through. Insurers that have previously dealt with forms and rating engines have figured this out – they have a handle on reality and how to manage it. Many have reorganized to centralize the resources that will perform these services. They have architects that understand the hazards of configuration and can help create the “bumper guards” that are necessary to ensure success.

In SMA’s research note, Policy Administration: P&C Plans and Priorities, 52% of insurers stated that it was difficult to find the right mix of business and technical skills to work on the configuration capabilities provided by modern policy, billing and claims systems. New skill sets are required to fully capitalize on the advantages of responsive and agile product development – new hybrid skill sets that include a combination of business analyst skills and an understanding of technical principles. Some insurers use business analysts. Others turn to IT users who have a strong understanding of business capabilities. In today’s environment, there are not many resources that meet these qualifications. Companies that are investing in training are advancing quickly.

A certain flexibility is inevitably needed to cultivate these truly skilled configurators. Insurance companies are organized around yesterday’s capabilities. Insurers need the ability to shift staff between departments – to create new working groups, to manage new priorities, to adapt to new business processes and to engage new skill sets. This flexibility equips an insurer to seize opportunities in the market, establish new modes of customer service and build business models that deliver value-added services that extend well beyond reaction and restoration.

The whole point of core transformation is that changes at the micro level can be used as a stimulus for changes at the macro level. Organizations able to address the technical and business capabilities that transformation demands can also make organizational shifts with enormous impacts. The key is to recognize that you must use some creativity and be willing to take some risks by challenging long-established traditions.

core

There is a happy ending to “Singing in the Rain,” and it is not through the solution that Jean Hagen’s studio recommends – that being traditional diction training. Jean finds that what she does best, using her unique voice, leads her down the road to success in the new world of the talkies. In the transformative new world, insurers can also find their own road to success, heading toward the ultimate goal of becoming a Next-Gen Insurer. Core transformation, with its combination of synergistic organizational, business and technical capabilities, is a key ingredient to getting there.