The revolution in the modern technology and the transformational nature of the economic market nowadays obliged the insurance companies to update their business methods in order to cope with the fierce competitions that face the insurance industries.
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The insurance industry is facing a large number of threatens that could lead to the extinction of that industry if not rectified such as banks and brokers. The bank system is a customer centric approach that focuses on the customer and acknowledges the fact that the best customer support service you provide, the more deals will be closed. That is why many insurance companies tend to use the bank database of clients to expand their sales rates without employing additional sales members or hiring the service of an independent broker or agent. The Bank Insurance Model (BIM), or what is commonly known as Bancassurance, benefits the insurance companies from the point that it takes advantage of the bank’s clients and exploit the bank’s sales team to sell more insurance products or certificates. But, although it is the insurance company who administers and manages the insurance policies and certificates, the Bancassurancepartnership allows the bank to share the commission with the insurance company, which result in a huge cut in the annual commission shares of the insurance company. Althoughthe Bancassurance system proves its efficiency in a large number of countries in the Americas, Asia, and the EuropeanUnion in providing a distribution, sales channel through the bank’s database of clients, a controversial discussion has arisen about the impact of implementing the Bancassurance system and how it allows the banks a substantial financial control over the insurance companies and contributes in the creation of the robust competition between insurers. The insurance companies are submitted to the bank system and the Bancassurance model because insurance companies, as a whole, lack the intuitive sense of attracting new clients or building a trustworthy relationship with the customer. An insurance company tends to concentrate on inventing new insurance products or creating a new type of insurance policy and neglect the most essential factor in the selling process, which is the client himself.Also, the independent brokers put a huge pressure on the insurance industry with the tight relationships they build with their clients. An independent insurance broker relieves his customers from the gigantic pain of searching for the right insurance coverage for the business and display a wide range of insurance products for the customer to consider. Furthermore, an insurance broker must be licensed, which typically gives the customer the idea that he has more experience than an insurance agent. The insurance agents are professional agents hired by the insurance companies to sell insurance policies and products. There are two types of insurance agents a Captive insurance agent and an independent insurance agent. A captive insurance agent works for a single insurance company, while the independent insurance agent works for a different number of insurance companies and offers his client the ability to choose between the different policies and products. But, whether you are dealing with a captive insurance agent or an independent insurance agent, their liability is limited to an administrative task that include the accurate processing of the paperwork. The lack of professional training programs and the shortage in the experienced insurance agents cause the insurance companies to lose a large amount of market shares for the benefit of the independent agents. Additionally, the working manpower of the insurance industry requires an urgent modernization in the heart and soul and need to attract new young talents that could not only manage the new smart business solutions and strategies, but also masters it in order to fairly compete with the state of the art technology systems, which are implemented by the competitions like banks. Besides, the insurance industry is still lingering in the 80th, applying an ancient and rickety business method in an attempt to drive the internet users and smart solutions generation to buy. The insurers are still ignoring all the prospects that they might have from the various social channels on the internet such as the Facebook, Twitter, Pinterest, and LinkedIn, Etc. Today’s buyers are tend to use the internet to buy everything, and the same applies to insurance policies. People do their online research before they decide on a specific insurance product and compare between the different products and providers until they reach the best deal on quality and price. But, the problem that face the insurance companies is that even if they have a business website- which most insurance companies do not have- that display their products and explain their mission, they are lacking the smart solutions and the intelligent manpower that allows the customer to buy their insurance policies directly from the internet without being obliged to hire an intermediate agent. On top of that, the technology adopted by the insurance companies is old mainframe programs that young talents cannot work on. Above all, the most crucial problems that encounter the insurance business nowadays are the poor analytic reports and non-effective documentation system. Any respectable insurance company must adhere to an effective analytic system that could forecast the risk degree of every policy and calculate the precise net revenue of the company. Additionally, the documentation system is another essential aspect of the insurance system as it ensures that all the data associated with every client will be saved in an organized way that enables any insurance agent or any manger to access the contracts, policies, and clients personal information easily. The sophisticated customers and the competitive economic market have obliged the insurers to adopt a new system such as CRM (Customer Relation Management) software which is capable to organize the insurance workflow and boost the efficiency of its employees with the smart features and the business solutions integrated with the system that could shift the whole insurance industry to the 21 century. The CRM software is capable to assist the insurance companies to solve their most crucial problems effectively.
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