Though the economic outlook appears to be brightening, most insurers are continuing to face challenges around revenue growth and profitability.
Traditionally, the industry has been slow to adopt new technologies, but there has been a significant interest in assessing whether Web 2.0 tools, from wikis and blogs to online communities, can improve business outcomes.
Web 2.0 technologies provide powerful levers for organizations to improve the effectiveness and efficiency of business activities that take place in the contexts of external and internal processes.
These levers can be categorized into Content, Community and Commerce. (See Table 1.)
The ever-increasing spectrum of available technology means that insurers need a lens to identify what would be relevant to them. Utilizing the following three perspectives can help create the right business case, get buy-in from key business stakeholders and ensure implementation is aligned to deliver desired business outcomes:
Business Outcome perspective. Insurers can choose one or more key business outcomes of an organization and identify technologies that could be relevant to achieving goals. Key business outcomes include revenue growth, cost containment and improved customer and employee experiences.
Stakeholder perspective. Web 2.0 technologies can be targeted to address three key stakeholders: employees, customers and partners such as distributors and suppliers. Insurers that are conservative have tried to use Web 2.0 initially for operational effectiveness through employee collaboration (internal blogs, wikis, discussion forums, podcasts) before venturing into investments towards distribution (RSS, portal on mobile, comparison shopping) or customers (rich Internet applications, live agents, online sales portals and the like).
Business Value Chain perspective. Some organizations tend to identify focus areas for growth and differentiation in certain parts of the value chain. Insurers may consider new business and underwriting processes as a competitive advantage. Others could view distribution or customer service as key focus areas. Once insurers identify their focus areas, they can identify which Web 2.0 technologies could help them fulfill their business drivers.
Insurers could combine these three perspectives with Web 2.0 technology options and its application levers to make Web 2.0 relevant to their organization.
For example, one leading insurer has identified revenue growth as a key business outcome and encouraged its IT department to explore how Web 2.0 can help. The insurer started exploring how information that's available on social networking sites could be used to identify potential prospects for selling life insurance, and create a detailed report on the prospects along with options for touch points through referrals.
These reports should help the agents improve their productivity and sales conversion. In this case, stakeholder focus and business value-chain impact are clearly developed to deliver business outcomes leveraging Web 2.0.
Table 2 shows other examples of methods that insurers can use to set and meet goals.
For effective Web 2.0 adoption, insurers can use these approaches to identify relevant Web 2.0 technology options and the application levers that impact the business process, as well as stakeholders' and business outcomes.
Web 2.0 technologies can help introduce products faster, make products more relevant to potential customers and improve sales conversion as well as stickiness with policyholders. These technologies can also help improve distribution effectiveness, operational efficiencies in home-office environments and employee engagement.
By identifying the business outcome and applying an appropriate technology matched with the right stakeholder audience, insurers can leverage the power of Web 2.0 to improve their bottom lines as well as their service and organizational cultures.
Key Points
* At Issue: Web 2.0 tools, from wikis and blogs to online communities, can improve business outcomes.
* The Situation: Web 2.0 technology can help insurers introduce products that are more relevant to potential customers and that improve policyholders' loyalty to their brand.
* What Needs to Happen: The ever-increasing spectrum of available technology means insurers need to identify ways to involve Web 2.0 in their operations.
Contributors: Mayank Gupta is principal architect at Infosys Technologies. He may be reached at mayank_gupta@infosys. com. Siva Nandiwada is associate vice president of the insurance, health care and life sciences practice at Infosys. He can be reached at siva_nandiwada@infosys.com.
Table 1:Categorization of various Web 2.0 technology options and examplesof their application. (Examples are also categorized as "maturepractice," "emerging practice" and "futuristic practice." Application Web 2.0Category Lever Technology Examples of ApplicationContent Content Virtual Pod casts/vodcasts of Visualization Worlds, newly introduced products Vodcasts, can be made available to RIA agents as well as customers. * Agent training through private virtual worlds, which can also help in meeting certification requirements. *** Content Mash-ups Underwriters can receive Aggregation a mash-up consisting of the forms filled, medical reports from the provider's systems, application status from workflow systems and additional client details from CRM systems. ** Content Wiki All product features can Customization be maintained in a wiki and continuously updated with any changes due to market/regulatory requirements. These can be made accessible to employees for various internal uses.** Content RSS, Agents can receive Search and Tag Clouds constant feeds from the Push home office on the new product plans, market/regulatory information, sales related updates, etc. * Agents could use tag clouds on the extranet to periodically view the information they want. Insurers can also view what agents are seeking. ***Community Collective Blogs, Wikis, Council of insurance Intelligence Forums, User agents/brokers on Reviews and Linkedln. My Cup of Cha Ratings, blog (ING-China) was Microblogging created in Asia-Pacific region. Peer-to-Peer Social Peer-to-peer insurance, Networks Networks, P2P which is based on pooling people together to insure each other at rates cheaper than they currently pay, without automatically losing the money they pay as premiums. ** Collaborative Shared Team Insurers are working with Content Space their offshore IT Generation partners toward product road-map development and other business initiatives. Shared team space would be an excellent platform for managing requirements, product features, etc. ** Community Social Network One leading insurer is Analytics Mining exploring an opportunity to leverage social networks for potential prospect lists, details and prospect referral options using analytics. **Commerce Dynamic User Live Agent Complementary, contextual Help Chat, Voice product suggestions on the website for end users. ** Over Internet Live chat with an insurance agent at Progressive. ** Protocol Live chat for recruitment of agents used by State Farm. ** Comparison Tickers Progressive earned the Shopping Web Marketing Association's Web Award for "Best Insurance Website" due in part to its scrolling "ticker" feature that provides competitors' rates. * Product Rich Internet Insurance customers can Customization Applications use a self-service website to create a policy tailored to their needs. **** Mature Practice in the insurance industry based on experienceof the authors.** Emerging Practice in the insurance industry based onexperience of the authors.*** Futuristic Practice in the insurance industry based onexperience of the authors.Table 2: Tying Web 2.0 technology to delivering business outcomes. Stakeholder Business Value ChainBusiness Outcome Focus ImpactedRevenue Growth Policyholder New Business Acquisition Agents New Business Acquisition Home Office Product Development Home Office New Business Acquisition Policyholder Marketing and PRCost Containment Underwriters New Business Acquisition Agents Training and Development Home Office New Business Acquisition Home Office ClaimsImprove Customer Policyholders MarketingExperience Customer Policyowner Servicing Service RepresentativesImprove Employee Home Office Employee EngagementExperience Stakeholder Application TechnologyBusiness Outcome Focus Lever OptionRevenue Growth Policyholder Immediate sale Live Agent of products to Chat prospects through timely information sharing. Agents Increasing Social Network referral options Mining for optimal prospecting. Home Office Reduce the time Shared Team to introduce new Space products by leveraging improved awareness and understanding of business requirements. Home Office Providing Rich Internet comparison Application shopping features on sales portal. Policyholder Leverage social Social Network networking community to create a positive message about the brand/ product/service offered.Cost Containment Underwriters Leverage Mash-ups application data mash-ups to improve underwriting productivity and effectiveness. Agents Cost-effective Private training of Virtual Worlds agents through private virtual worlds. Home Office Cost reduction Rich Internet through Application disinter- mediation of agents by selling policies online through sales portals. Home Office Internal Wikis, knowledge Discussion management of Forums potential fraud scenarios during claims processing, to improve productivity and reduce errors.Improve Customer Policyholders Social Social NetworkExperience networking site for a niche target segment to understand customer preferences and create a positive image of the insurance company. Customer Improve customer Live Agent Service experience for Chat Representatives tech-savvy consumers by using live agent chat.Improve Employee Home Office Improve employee Wikis, Blogs,Experience communication Discussion and engagement. Forums, Podcasts, Vodcasts, etc.
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