New sales channels, CRM tools focus at LOMA conference

With the latest Web-enabled technology and a wealthy client base, investment advisers are being targeted by insurance companies as an obvious sales channel. But getting high-margin stock brokers to bite at the smaller commissions from insurance sales will require a standardized technology platform.

Finding new sales channels and devising customer relationship management (CRM) tools that can cut costs by creating data repositories offering quick access to client portfolios and histories were among the big topics at the LOMA Distribution Technology Conference here yesterday.

Byren Innes, a consultant at NewLink Group Inc. in Toronto, said that in Canada alone, 6,825 investment advisers who are licensed to sell insurance currently generate just 5 percent of the insurance industry's revenue. Revenue figures are similar in the US. "You'd think there's an opportunity there to get [them] to sell more insurance," Innes said.

While that opportunity exists at brokerage houses, investment banks or independent dealers, it has yet to flourish because of the complexity of varying insurance procedures and paperwork, such as insurance forms, and because of the low rate of return in comparison to stock trades.

"They will not put insurance software on their machines," Innes said of investment advisers. "They want a multiple-supplier platform that only a vendor can supply."

Vendor-hosted Web portals that provide multiple insurance carrier offerings and simple policy formats already exist, allowing consumers to easily begin the process of purchasing insurance.

In September, for example, Zurich North America Canada launched a Web-based application that offers simple analysis tools, various supplier quotes and illustrators. It's already being used by financial advisers to sell insurance policies, Innes said. The technology also automatically populates a DB2 database with client information that can be used to generate instant reports, so brokers know their client's portfolio and call history.

The need to centralize data was also a key topic among distribution IT managers. In confronting that issue, Ron Jacobsmeyer, director of operations at General American Life Insurance Co., said his company went with an in-house project called GenServe, which created a central database using Lotus Notes.

"We created a Lotus Notes form that looked like the contract," he said, explaining that middleware is used to migrate customer information from the front office to the Notes database. "One of the reasons we went with Lotus Notes is we were able to Web enable it," he said.

General American Life also created a "quick-start" unit to train new agents on using the centralized database. Having a customer service representative look up information for a distributor costs US$6 to $8 per call, but allowing the distributors to look it up via a Web portal costs just 14 cents, Jacobsmeyer said.

The problem with data conversion to the new system was that many of the legacy customer and distributor databases were dispersed throughout the company, and the data included paper records.

"You go to someone's computer terminal and there are all these Post-It notes around it," Jacobsmeyer said. He chose to keep the legacy systems running for pending insurance deals, but created an entirely new database for customers brought in after Jan. 1, 2001.

Fred Verboom, CRM management program officer at Canada LIfe Assurance Co. in Toronto, said partner-relationship management has been key in moving from a product-centric business to a process-based organization.

"Our CRM vision is to provide our [distributors] with a single view of the customer," Verboom said, adding that the company has also been able to put together a centralized view of their distributors.

Canada Life was working with a decentralized architecture and more than 25 million records in January. Using software from San Mateo, Calif.-based Siebel Systems Inc., it rolled out a shared customer database with a common front office view that allows distributor self-service tools, such as customer data tracking. The insurer also chose Costa Mesa, Calif.-based Filenet Corp. for its document management and imaging service.

With a centralized database for distributors to access via the Web, Verboom said the company was able to reduce customer service center operations by 12 percent.

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