Still in its infancy, knowledge management technology has the potential to help carriers deliver a consistent brand image and high-impact advertising to target audiences.Advocates of knowledge management systems have long pointed to the many benefits insurance carriers could derive from the technology, but one area frequently overlooked is brand image.
Knowledge management is still in its infancy within the insurance industry. And, as a result, many of its implications have yet to be fully explored.
However, some in the industry see a natural fit between knowledge management and improved marketing and branding strategies.
In its simplest form, knowledge management is a process that enables a company to gather and store information that users can manipulate to gain new insights into their businesses, and make better decisions about resources, new business initiatives, streamlined procedures, even hiring practices.
Marketing experts say these insights also can be applied to marketing and branding efforts. For example, an insurance company can use knowledge management to better educate and train its field representatives, ensuring they interact with insureds in a way that is consistent with the carrier's brand image and business objectives.
Similarly, an insurer can use the principles to develop more effective advertising that delivers high-impact information to a target audience.
The Chubb Corp., Warren, N.J., is one of the insurance industry's earliest adopters of knowledge management practices, as well as one of its strongest advocates. Richard Cantor, knowledge management unit leader at Chubb, says the approach plays an important role in supporting the company's brand image, which he describes as a strong insurer with a reputation for integrity, innovation, and depth of product.
Words in action
"We support this corporate brand with company values that include life-long learning, unparalleled expertise and deep product knowledge" among the field force, he says. "When you apply these (values) as a way of doing business, the approach yields a superior experience for our customers, including our producers and insureds."
The idea is to use knowledge management to provide Chubb's field representatives with an easy and efficient means of gathering the intelligence they need to perform their jobs better, Cantor says.
This includes not only the most recent product information, but also insights as to how to best position products and services for a specific target audience.
"Knowledge management supports this approach in a fundamental way because it allows us to apply timely, relevant and consistent resources to a marketplace in as efficient a way as possible," he adds.
The other area in which knowledge management can give a boost to an insurer's marketing and branding efforts is in the creation of more effective advertising campaigns.
The success of any organization depends on its ability to understand the wants and needs of its customers, and the difference between the two, says Bill Keenan, president of DeNovo Corp., a Hockessin, Del.-based integrated advertising and consulting firm. For example, a carrier's customer might want life insurance, but what he or she really needs is a retirement savings plan with life coverage. A knowledge management program could play an important role in developing that type of insight, he says.
"Once you have the knowledge, there are a lot of tools that are available (to create more targeted marketing programs)," Keenan says. "Once you begin to learn about and understand your customers, your success will depend on what you do with that insight."
A knowledge management program not only could uncover cross-selling and up-selling opportunities, but also reinforce the relationship between an insurer and its customers, he adds.
Technology plays a role in knowledge management in three areas, says Chubb's Cantor: collaboration, dissemination and content management.
Collaboration tools, such as instant messaging and threaded discussion applications, enable a company to be more comprehensive and inclusive in its efforts to gather marketing information and insight.
"If you look at where these exchanges traditionally took place, it used to be around the water cooler," says Cantor.
As a result, a fairly limited audience was involved. "The tools in place today allow that to happen virtually and globally," he says.
Dissemination tools, such as the Internet and intranets, streamline the distribution of marketing intelligence to all parts of the organization and free the field force to take on more of a marketing role.
"We've shortened the amount of time it takes an underwriter to gather the information necessary to make underwriting decisions, which allows them to spend more time on that (customer) relationship," Cantor explains.
The third technology element-content-focused tools such as content management systems, search engines and portal systems-lets Chubb refine its marketing messages for greater impact.
"That allows the right content to be presented at the right time, in the right place, to the right people and in the right way. That's the essence of knowledge management," Cantor says.
Of course, before any of the benefits of knowledge management can be realized, a system must be implemented and a number of hurdles must be overcome.
Getting the ball rolling
Perhaps the most important challenge is building support for the initiative throughout the organization. "It has to be supported at the highest management levels as well as at the grass-roots level," says Cantor.
The first phase of Chubb's initiative, which began three years ago, focused on educating employees about knowledge management and how it will help the insurer achieve its goals.
"We're three years into it, and admittedly, the first year was a little rocky," Cantor says. "The challenge is you don't have a lot of tangible things to demonstrate." The key to overcoming the skepticism, he says, is to "get some wins under your belt" early.
"You want to view these things in a holistic way, but you have to start in a very focused manner," he adds.
While technology tools are important, Cantor says it would be a mistake for an insurance company to focus on technology rather than creating a corporate culture that encourages knowledge creation and sharing.
"Knowledge management is more about people and purpose-actionable information than anything else," he says. "If a company wants to lead with technology, the (knowledge management) initiative will at worst fail and at best take longer to realize a return on investment."
Another challenge is to free up resources from IT budgets that are experiencing little or no growth, says Mike LaPorta, senior partner in the insurance practice at Deloitte Consulting, Stamford, Conn. With budgets remaining basically the same, maintenance for existing systems and applications are claiming a large piece of the pie, he says.
In addition, other programs with higher, faster, and more demonstrable returns-such as procurement-are getting priority over knowledge management initiatives.
Knowledge management could also be a powerful tool for training and educating field forces, but it faces an uphill climb, he adds. Deloitte Consulting is talking with a couple of companies about building such systems, but it's not a high priority in terms of spending.
Deloitte has been promulgating the concept for about two years, LaPorta says. "But, insurance companies aren't early adopters of any technology."
Justifying the technology through demonstrable results is yet nother challenge, even for insurers that have been actively implementing programs.
"We're not the only ones facing the challenge of making tangible ROI arguments on why it's important to create content and support knowledge management," says Chubb's Cantor.
One way Chubb overcomes this obstacle is by soliciting feedback from its employees.
"We have conducted a number of surveys of our field staff to assess the success of the initiative," Cantor says. "When you compare a non-knowledge-management program with one whose foundation is based on knowledge management principles, we went from a 50% approval rate to a 92% approval rate."
A growing trend
While it's still too early to draw direct correlations between these findings and bottom-line results, the findings show that the field staff is happy with the support and information they receive and are better equipped to do their jobs, he says. And, a happier field force is a more productive group of employees.
Despite the challenges, industry observers believe knowledge management practices will become more widespread among insurance companies, particularly as executives begin to understand the effects such programs can have, not only on marketing and branding efforts, but on other parts of the organization as well.
"Knowledge management as a business approach is still in its infancy in terms of the modern way in which we're thinking about it," Cantor.
"There's still (the need for) a shifting of the culture to be more knowledge-enabled. We've made great strides in three years, but there's still room for improvement, and there always will be," he says.
Chuck Paustian is a Chicago-based freelance journalist.
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