The insurance industry is showing a growing interest in buying and implementing customer relationship management (CRM) technology, particularly in the areas of sales and marketing, according to a report from IT market analyst, Aberdeen Group.
More than 80% of insurance industry firms surveyed said that their budget for CRM was less than US$500,000 in 2002, while 44.9% indicated that their CRM spending would increase in 2003. Furthermore, some 37.4% said that spending on CRM now has a higher priority than other areas of IT spending.
However, the report, CRM and the Insurance Industry, suggests that insurance users do not always feel that CRM suites offer the functionality and flexibility they require, and that this may be the main reason that many firms still prefer to build their own customer-facing applications.
All about flexibility
"Until recently, a lack of applications on the market and a low degree of domain expertise built into customer facing applications were two of the reasons many insurance companies chose to write their own applications, rather than rely on vendors," said Denis Pombriant, author of the report, and vice president and research director for Aberdeen's CRM division.
"Most organisations have a blend of packaged and in-house developed customer facing applications, and their decisions about whether to build or buy customer facing applications have less to do with cost and much more to do with flexibility and functionality," noted Pombriant.
Not price sensitive
According to the report, only 24.5% of respondents said their reason for electing to build rather than buy CRM was based on price. The remaining majority said that, in their opinion, the available software lacked the specificity or domain expertise the industry requires.
The data also suggested that enhanced support of sales and marketing business processes is considered the first order of business. Most of the companies surveyed were relatively satisfied with their existing systems.
The report has been made available for downloaded at no charge by registering with Aberdeen's web site.