Does your CRM hold the secret to underwriting profitability?

By Emma McGovern, Customer Success Manager, Cytora

Profitable growth could lie untapped in your CRM, according to Cytora’s Emma McGovern

Customer Relationship Management systems (CRM) are commonplace in insurance.

They were introduced to improve the ability to target and convert business, and to support brokers in effective outreach to customers. As a result, CRMs have become particularly important in the competitive SME commercial space, where new entrants to the market and new distribution channels are squeezing insurers today. 

MGAs, for example, are putting great pressure on the incumbents. The MGA market has doubled since 2012, and 79 percent of insurers expected MGA capacity to hold steady or grow in 2020.

The opportunity for CRMs to help insurers compete in this crowded market is often eclipsed by the technology’s reputation.

It’s often deemed too sales orientated and not fit for purpose in the nuance of commercial insurance. These systems often struggle to flex from micro-SME right up to large specialty risks that make up the commercial insurance market. In addition, certain underwriters don’t like to be bucketed as ‘sales’, or performance-managed in the way that CRM allows. 

Finding a place for CRMs in insurance

So do these concerns leave CRMs redundant within commercial insurance? Or can you unlock more value from your existing systems? 

Market competition requires insurers to change their strategies for prospecting, and management teams often believe a CRM can help with the necessary structure, reporting and discipline of ‘new age’ business development. More than 75% of primary insurers in the UK use a CRM system, and they are often heavily embedded into their IT architecture and workflows.

Functioning effectively, CRMs encourage fast decision making, speedy communication with the broker and aid targeting the most relevant business. At worst, CRMs facilitate a checkbox activity in a burdensome, micro-managed workflow. 

Used even in the lightest sense, most insurers log basic risk information about a business coming in the door, such as a company name, risk address or renewal date. 

Today the opportunity lies in getting buy-in from underwriters, by maximising the use of this data while reducing manual data collection for a risk. 

 Maximising CRM data 

CRMs are regularly the main system of record, and the first entry point for submission data entering the tech stack. When data enters the system, the underwriting process begins. But crucially, so do the challenges that come with it. Linking internal and external data points remains a challenge, and re-keying information from one system to another becomes a tremendous bottleneck on productivity. 

Integrating CRMs with external data sources and machine learning solutions has the potential to eliminate many of the inefficiencies of the underwriting process. Low value add activities such as data collection and submission filtering for appetite can be undertaken programmatically when an opportunity is entered into the underwriting systems. 

Putting the “relationship management” back into CRM can nurture vital relationships with brokers, strained in recent years by a softer market. The chances of converting a lead actually reduce up to 3000 times within the first five hours of an initial inquiry. So a fast “No” to a broker, enabled by this submission filtering process, can be as valuable as a quote. 

With underwriters focusing on higher value opportunities rather than low return tasks, management can use the granular business information benefits of CRMs to provide support at case level. This gives the confidence that the pipeline has been optimised. 

And with rate increases at their most significant since 2001-2004, 2021 is a fantastic opportunity to review current processes. 

Locating untapped business

Opportunity doesn’t just lie with new business coming through the door. Instead, as insurers settle into a hardening market, opportunities for profitable growth could lie untapped within their own CRMs. 

Business previously declined may now have the potential to be revisited under new appetite boundaries and rate improvements.  Insurers, whether actively using CRMs as integral units within the workflow, or as systems of record in a simple way, can benefit from using these systems as “opportunity pots”. 

Entries already augmented with third party data and filtered for appetite within the system allows this review to be undertaken quickly and easily. Accessing an additional 5-10% of opportunities with the same amount of resource can make all the difference. 

Whether tapping into existing opportunities, or catching inbound risks from live submissions, the CRM can act as the filtering unit within the underwriting machine. This arguably becomes easier as the market hardens, when insurers tend to become less flexible and nuanced in their underwriting. 

By capturing even just the most basic risk information, and combining this with external data and machine learning, the process of qualifying these opportunities can be largely automated and optimised against today’s appetite 

The outcome? Processing and prioritising higher value opportunities from both incoming and historical submissions, while flagging opportunities that are out of appetite, or deemed lower value based on underwriting strategy. 

So, CRMs could be the gateway to profitable growth. Will you rejuvenate or retire your systems in 2021? 

To read more about augmenting submissions with external data, read our recent blog here.