Archive for December, 2013

Disabled Life Insurer

Monday, December 23rd, 2013

I asked my Financial Adviser recently to facilitate some long term disability insurance on my behalf following a purchase a couple of months earlier of some term life insurance coverage with a prominent UK life insurer, Legal & General. To accelerate the process, I provided the insurer with access to full details of a recent comprehensive executive medical examination. At the insurance underwriter’s request, I was asked to fill out a questionnaire with in excess of 30 questions providing detailed health and welfare information, to verify I am who I purport to be and to declare in writing I have dark hair with increasing tints of grey! Somewhere along the line, in their underwriting rule book, they felt they needed me to take a medical exam to prove I wasn’t a smoker (despite my declaration that is not the case in their questionnaire). Due to the holidays and their medical adviser’s lack of availability, we are set to do that in mid-January. I have spent 8 weeks so far with a prospect of a further 3 to 4 weeks if I am lucky to bind coverage, participated in 9 calls, and completed two extensive forms. By all counts, I am in reasonable health, working in a low hazard occupation (other than walking across a highwire to do business with insurance companies) and an attractive insurance risk.

My point is that some businesses make it incredibly hard for customers to do business with them, and their own actions destroy the foundation of profitable growth – trusting customer relationships.

Legal and General has in excess of £50 billion of assets under management and growth prospects in key global markets are positive. Yet they risk a huge loss of customer goodwill with their current level of bureaucracy.

It is insufficient to rely on positive trends. Businesses, who want to profitably grow, need to evolve with the consumer, they need to educate customers better, they need to adapt their customer interface to enable the customer to buy their products and services faster and with less obstacles. Top management needs to shop their own business.

© James Berkeley 2013.

Choreographing Client Acquisition In Professional Services

Tuesday, December 10th, 2013

We are at the stage of determining the right school for our four year old daughter. Living in South West London, there is an abundance of great day prep-schools, some of whom have branched out overseas in search of further growth and expansion. Ownership is in the hands of family members, charitable trusts and private sector businesses. All have great facilities, strong teaching faculties, excellent exam results and attract a diverse group of children from homes in the surrounding area. As a prospective Parent on your initial visit, you are welcomed through the School’s front door, given a tour by a Governor, a senior teacher or a child near graduation. There is a fleeting few minutes to pose the odd question to the School Head and Admissions Officer. Then comes the stiff envelope dropping through the mailbox with an invitation to the School’s “Assessment Day” or in a small number of cases, a conditional offer. A brief hour ensues where the academic staff make judgements about the suitability of your child.

For many Parents in London, it is the first real “test” their children have ever faced or rather their Parents have faced.  For some of the latter, there is a huge sense of self-worth at stake. Mothers dress up immaculately (think Sotheby’s preview attire). Time-pressed Fathers dash from the McKinsey Boardroom or Citibank Towers to be “present” (the blackberry slipping out of the breast pocket in the dimly lit corridors between the Reception class and Year 1 smiling faces). Months of feverish gossip are going to end within 7 days in elation or a sense of failure, when the letter arrives with the “offer” or polite declinature.

Making decisions as a Parent comes down to a small number of qualitative judgements: our relationship with the Head Teacher or Headmistress, our feel about the “fit” between our child and the school environment, and the other Parents. Equally, one must presume there is a small number of qualitative decisions those schools make about the children, and quite possibly, the Parents. Those judgements are fine.

The same experience applies to the choices many customers are asked to make between the top 5 brands in most professional service sectors (accountants, lawyers, architects, advertising, PR and so forth). How well do you choreograph the customer experience from the moment they first hear, read or see your brand? Do you even think about choreographing the experience? Can you easily identify the “touch points” along the journey to welcoming a new client? Do you prioritise time, money and resource deliberately towards the “high touch” (the in-person moments) rather than the “low touch” (website, social media, media interviews etc.)? Do you train and develop your people to engage in meaningful conversations or merely rely on symbolic gestures? Do you measure the quantitative and qualitative impact changes in your approach have on your firm’s business acquisition results? If you don’t, you can sure bet your customers are.

© James Berkeley 2013.

Embracing Digital Customers in Analogue Insurance Businesses

Tuesday, December 10th, 2013

Large swathes of the insurance and reinsurance sectors are still operating predominantly analogue businesses in 2013. Yet the greatest change and fastest growth area is their customers increasing competency with and willingness to make purchases through mobile platforms (smartphone, tablets etc.) Profitable growth demands that those businesses either charge more for assuming risk (difficult to do) or they dramatically improve productivity.

It takes more than a website and basic e-commerce if those firms want to be significant players in their respective markets. Achieving substantial and substantial growth in competitive mature and high growth markets necessitates a digital strategy that intelligently addresses the key customer touch points and their own business model. Many dumb consultants and internal IT experts suggest prioritising the “points of pain”. That is a stupid strategy. Let’s keep it simple,

Focus on six fundamental parts of the business: Corporate Operations and Governance, Underwriting and Products, Actuarial and Risk Management, Claims & Policy Management, Disputes Resolution & Litigation and Sales & Distribution.

Aside from the obvious return on investment decisions, demand each department head with profit and loss responsibility answers four questions:

– Distinguish Priorities: Where is the “seriousness” (high/moderate/low impact on the customer experience), “urgency” and “growth” (escalating/stable/insignificant) for digital investment in each function?

– Measure Progress and Success: What would tell us that we are making progress or have arrived at our goal?

– Demand Accountability: Who must be accountable (internal and external) for the progress and success?

– Remove obstacles and procrastination: What, if anything, stops us starting tomorrow to rapidly transform our business into a strong, dynamic digital competitor?

My observation with countless recent discussions with insurance and reinsurance executives is the cancerous fear of ending up in huge digital transformation projects that never reach their destination and result in an abundance of abandoned or mothballed projects. That fear is fundamentally about a loss of power and control. Control in the form of delegating responsibility to technical experts, who lose sight of the commercial imperatives. Power in the sense of being associated with a failed project and anger from shareholders, customers and other key constituents. Ask the right questions, demand transparent answers and that “journey” to the digital world can be hugely profitable. After all, what is the point of leadership if you are not comfortable using that power and applying the appropriate level of control.

Unprecendented Growth in China, Avoid These Speed Bumps

Friday, December 6th, 2013

Click here for the recent contribution to The Street article