Sifting through the opposing rulings on the legality of the subsidies on the federal health insurance exchange.
By Cyril Tuohy
For insurance carriers and financial advisors, developing a 360-degree view of clients is a lot more difficult than it sounds – or looks.
It’s a tantalizing concept, though.
The website propertycasualty360.com devotes itself to all things property and casualty day and night, from left to right, from top to bottom. Even an independent registered investment advisor group goes by the name of 360 Financial.
“A complete 360 is the most complete internal and external understanding an organization can have of an individual,” said Rebecca Shockley, Technology and Data Global Research Leader for IBM Institute for Business Value.
For insurers, a 360-degree view requires the integration of claims, policy issuance and administration, billing and compliance systems.
Those systems need to “talk to” the distribution systems so that agents and advisors have access to the same information.
Carriers and distributors need a single picture. But understanding the customer “fully and completely” instead of as a series of products has never been easy, even in an age when financial services companies spend tens of millions of dollars to acquire such a view, Shockley said.
“You would be surprised to understand how few companies are capable of doing this as a matter of routine,” Shockley said in an interview with InsuranceNewsNet.
“The process that makes it happen is called ‘master data management,’” she added.
Most financial services companies were initially based on legacy systems — cultural and computational — that revolved around products.
Insurance companies had a life division, an auto division, a home division. Banks were centered around retail checking, mortgages and commercial accounts. Every merger and acquisition, however, requires an integration of databases, a project made more challenging within an industry that is already heavily siloed.
“To understand that the exact same customer had both a life insurance policy and a homeowner policy was a major undertaking. And yet, the customer knows they have two policies with one company ... not two policies with two subdivisions of a company,” Shockley said.
Think of a 360-degree view as having eyes in the back of your head. Each set of eyes has to know what the other is looking at to process the information as one in order to avoid blind spots or prevent double-vision. That’s the hard part.
A complete picture amounts to more than the sum of a client’s products or policies, Shockley said. It includes interactions with the agent and the call center, the number and tenure of a product, the claim history and the solicitation history.
While an entire client view “continues to be a complicated picture to assemble,” clients don’t see why companies don’t know all those details. The wealthier the client, the more a client expects advisors to provide a complete portrait of their holdings, past histories and future needs.
A 90-degree or 180-degree view limits the ability of carriers and agents to understand which customers produce the highest net revenue, she said.
It also prevents agents from determining the largest annual revenue increases, and thwarts identifying the risks associated with certain customers and prospects, all of which have an impact on customer satisfaction, she added.
Agents and carriers that lack a comprehensive view, effective stewardship and hierarchy management directly impact the quality of the customer relationship, so it’s important for companies to have as much of a 360-view as they can muster.
The past decade has seen a huge increase in the volume, velocity and variety of information generated from outside the company via social media and Internet-based sources. In addition, information that an agent collected and considered a trade secret is now publicly available.
Life stages of childbirth, school triumphs, professional success, marriage, family tragedy, memberships in work-related or sports associations, hobbies, beliefs and behavior patterns, opinions and sentiment, dreams and goals, are available in the public domain.
There’s even an expression for the tidal wave of this new information that companies need to analyze, catalogue and integrate with what systems already know about existing customers. Industry analysts call it streaming analytics.
“It is the digital catalog of all the details about an individual that old-fashioned insurance agents knew by being down the street, down the pew and across the school yard,” Shockley said.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at firstname.lastname@example.org.
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