What You Don't Do Can Hurt You
Michael Sauber | March 25, 2014
In 2013, technology initiatives designed to phase out or modernize legacy core administration systems finally moved from “potential” to “reality” for many insurers. Simply put, with growing consumer and industry demand for accessibility, greater agility and increased integration, insurers were finally forced to act.
Core administration modernization projects are complex and risk-laden, and forward-thinking insurers have learned to tackle scope creep with agile development, and use modern configuration tools to put more control into the hands of business analysts. However, other factors that could make or break a core systems project, like the inclusion of customer communication management (CCM) for flexible, rapid, and cost-effective creation and distribution of policies and related documents, are often overlooked.
Understandably, just as insurers must concentrate on core competencies to achieve success, core administration systems must do the same. Policy administration systems focus on policy processing, claims administration systems focus on managing claims, and billing systems focus on invoicing new and renewing policies, as well as payment processing. Most of these core administration systems therefore lack the robust document design, production and distribution functionality of a standalone CCM solution.
By incorporating a CCM system into core administration modernization projects at the outset, insurers gain efficiencies from full integration. Plus, business users gain a powerful tool for document creation, customers gain user-friendly personalization features, and insurers easily expand document distribution options to include digital channels.
Complement Don’t Complicate
Industry failure rates for core administration system replacement projects typically hover around 70 percent, and are certainly driven by vendor missteps, scope creep and conversion challenges, but also by the inability of the project’s results to meet both executive and customer expectations. This clearly means any addition to such a complex initiative must complement, and not complicate, the overall goal.
The best CCM solutions are designed to integrate easily and seamlessly with core administration systems, provide business user friendliness, and greater functionality than a core administration system alone, factors which accelerate implementation, increase user adoption, and boost executive confidence levels.
Furthermore, CCM systems streamline internal operations by automating the production of customized content from within an insurer’s core administration system. This means data from many systems converges in a single stream, ensuring pertinent customer information is instantly accessible from a centralized location.
Once a serious consideration, price alone no longer drives competitive advantage. Today’s insurer must rapidly react to market conditions, make rate changes, adjust underwriting rules to company appetite, and push form updates into the system. In a 24x7x365, “gotta-have-it-now” society, insurers with legacy core systems are limited in their ability to move quickly.
The entry of Gen X and Gen Y consumers into the insurance marketplace, with high expectations for personalization, accessibility, product features, and customer service, magnifies the need for insurers to modernize. Including CCM in this process provides a key link between core administration systems and the customer.
CCM puts a “where you want it, when you want it, how you want it” face on what is often seen as a mundane element of the customer relationship, and accelerates production of mission-critical quotes, policies, renewal notices, and claim documents.
Empowering Distribution Channels
Insurers today are rightly focused on quickly producing quotes and closing new business, but should be prepared to place equal emphasis on delivering a positive customer experience. While core administration systems excel at completing specific tasks or transactions, they typically have meager abilities to boost the customer experience.
CCM, on the other hand, draws disparate data from multiple systems into a single process to facilitate creation of more personalized content and messaging through preferred delivery channels, and ultimately, more timely responses. In addition to phone calls and agent interactions, insurers now commonly rely on email, mobile/web, instant messaging, online chats, and social media channels to communicate with customers. By combining the talents of CCM with the strengths of core administration systems, insurers can guarantee a better experience for the customer, through their distribution channel of choice.
In Addition Not Instead
It’s easy for insurers to become overwhelmed by the scope and scale of core administration modernization and overlook an important aspect, such as CCM. However, when completed as part of the overall project, CCM can improve the outcome by producing a greater level of personalization and customization, streamlining communications and document creation, and integrating with back-end systems to keep everything working in lockstep.
Modern CCM solutions can be easily tailored to an insurer’s specific needs depending on line of business written, distribution channels utilized, and geographic regions served. The bottom line: Implementing CCM in tandem with a core administration system modernization initiative reduces your overall project failure risk and enhances your ability to catch up—and keep up—with customer demand.
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