Each of the three types of relationships implies a general class of product offering. The transaction-based relationship implies a single product; the technical advisory relationship accompanies product and service bundles; and partnership involves a theme-based array of products and services that change according to the customer’s stage of life. By this yardstick, the Insurance business is a typical case of the partnership-based approach. Any good agent would keep track of his client’s evolving needs by considering his age, income, life events etc. However, a major limitation of the partnership role has been the number of people that each agent can handle—it is simply a matter of scale. With the help of technology, insurance firms can find ways to expand the number of people that can be reached, deepen specific targeted relationships, and lower the cost of working with additional constituencies. The appropriate strategy for a business like insurance is therefore personalization – catering to the segment size of one. The traditional distribution channel for insurers – the agent, has always provided personalized services. While cost imperatives have forced insurers to look at alternative direct selling channels such as the Internet, the agent’s strategy of personalization needs to be replicated across the new channels. Figure 1:Customer relationship strategies as function of the nature of product.The above stated theory, of personalization being a critical factor for success in the Insurance industry, is borne out by surveys conducted among consumers and insurance industry executives. In the year 2000, Delloitte Research conducted a study of the requirements of consumers of financial services across ten countries in North America, Europe and Asia Pacific. The study covered Insurance, Banking and Investment services. For all these services, the consumers were asked to rate the following in order of...
