In the legal profession, attorneys refer to it as the "discovery" process where a legal team embarks upon intensive fact-finding to construct its case.At Bloomington, Ill.-based State Farm Mutual Automobile Insurance Co., there's a variation of the concept that's beginning to take shape. It's all part of State Farm's attempt to optimize cross-selling opportunities within its multi-product line that spans homeowners, life, annuities and mutual funds, to name a few.

But as lawyers and insurers well know, mastering the discovery process is far from easy. The lack of solid fact-finding can cost a legal team a case. On the insurance side, it can cost a sale.

It might not be against the law, but if there's one thing insurers have over the years been guilty of, it's their inability to develop a profile of their customers-the linchpin to effective cross selling.

In a perfect world, State Farm envisions a scenario where it can whet the appetite of its property/casualty customers to go scouting for bank and other financial services products-all from State Farm's core distribution channel-its 17,000 exclusive agents.

To do so, the company has steadily increased its investments in the tools and technologies to support cross-selling strategies across a multi-line product portfolio.

As part of an internal program known as the Insurance and Financial Review (IFR), State Farm agents conduct what the carrier refers to as a "discovery conversation" with clients, which helps identify the gaps in their insurance and financial product needs portfolio, says Mike Kiley, director, agency sales integration, State Farm.

"Within the IFR, we use a needs assessment questionnaire (NAQ), which is a critical part of the discovery conversation. An agent discusses everything from a customer's protection needs to their financial goals," Kiley comments.

Working through an agent or independently, customers can go to to activate Web links within what State Farm calls its "Pyramid of Needs."

How is IFR working? In research conducted over a 90-day period, State Farm examined the tendencies of individuals who completed the NAQ and/or used one of State Farm's online calculators to review these needs. "We found that 28.5% of customers who competed the NAQ and perhaps also used an online calculator were more likely to acquire a bank product from us than customers that did not complete the NAQ or use the calculators," explains Kiley.

Stumble or bundle?

Insurance companies on a mission to increase their "market basket" of customer spending realize that bundling their products and services is a far cry from cross-selling strategies at the retail level, where a fine wine display in a supermarket might be positioned with gourmet caviar to generate sales.

Acquiring insurance products is a contemplative process for most individuals. As they examine a family of products within one line, most consumers have to be given a compelling reason to acquire product B when they already have acquired product A.

State Farm built its reputation on the strength of its property/casualty products. The key is to educate customers about the synergistic relationship that exists between various P&C products and certain financial products, Kiley says.

"Property/casualty products bring customers in the door, and from there, agents have an opportunity to sell them life and annuities," Kiley explains. "They come to us for the competitive rates and claims service and the mutual trust the brand brings."

To derive fulfillment with cross selling, many insurers have had to endure data integration challenges. Struggling with multiple, disparate legacy systems, many insurers lack an enterprisewide view of customers, which they need to maximize cross selling.

"In the insurance industry, there are underpinnings that prevent insurers from receiving a single, consolidated view of customers, and this hinders their ability to cross sell," says Denis Pombriant, principal, CRM, at Boston-based research and consulting firm Beagle Research Group.

Before it invested in a technology that provides a unified view of customers, Madison, Wis.-based CUNA Mutual Group struggled to grasp the comprehensive needs of its credit-union customers. "In the past, it was very difficult to identify customers across multiple databases," says Ron Marsden, assistant vice president of business systems and operations, member solutions group, for CUNA Mutual.

"We have a variety of administrative systems for the various products we offer, such as accidental death and dismemberment (AD&D), life, and auto, but these systems didn't 'speak to each other.' When members called, it was difficult to identify all the relationships they had with us."

Merger and acquisition activity in the industry has only served to compound the dilemma. "At our company, mergers and acquisitions have led to what I call a 'macro-level' data integration challenge," states Robert Dolmovich, vice president, data strategies, for Chattanooga, Tenn.-based UnumProvident Corp., a provider of life, disability income and long-term care products.

"Prior to investing in a customer data integration solution, we used a functional but very basic customer index. It contained the name of the customer, a policy number and claims numbers. We wanted to have more free-flowing information, and the ability to do more customer profiling within the administration systems."

While disparate legacy systems have caused insurers to have a cloudy view of customers, industry experts believe there is a silver lining to the problem. "Insurers learned a lesson about customer relationship management (CRM) from banks," says Susan Cournoyer, principal analyst for Stamford, Conn.-based Gartner Inc.

"At many banks, there was a herd mentality to adopt 'touch-point' CRM solutions. What banks lacked was the analytical side of CRM-the extraction of data from legacy systems. So, a customer might have a mortgage, checking account and a credit card with a bank, but the lack of integration among multiple back-end systems made it hard to capture a consolidated view."

Because insurers have been late adopters of CRM, they bypassed touch-point solutions in favor of analytical solutions to identify opportunities to cross sell and up-sell.

But make no mistake, insurers remain in a state of uncertainty about how extensively to invest in customer data integration projects for the purpose of cross selling and up-selling customers.

Sharper focus

Investing ambitiously to drive the IFR campaign, State Farm's 17,000 agents now use a Web-based tool that has been extremely helpful in identifying cross-selling opportunities that a policyholder might have overlooked, says Kiley.

Offering the tool as part of an intranet property known as AgentsOnline, State Farm is so far "quite pleased with the results we've seen with IFR," says Kiley. "It's an opportunity to build customer relationships and build retention, as well as insulate our book of business."

UnumProvident fortified its cross-selling fortunes when it recently implemented DWL Customer, a technology developed by Atlanta-based DWL Inc. "We have a corporate goal to improve operations by equipping marketing, sales and service staff with more complete information about each customer and producer," Dolmovich asserts. "The solution we've put in place gives us the best opportunity to leverage our prior analytic work and accelerate several operational improvements that support our strategic initiatives."

In the long term, UnumProvident plans to position DWL Customer as a complete hub of information about customers and producers and associated roles and relationships for its internal sales team as well as its external brokers. "DWL Customer will be the source system of record for customer and producer contact information-and an enabler for accessing information from various data sources," says Dolmovich.

The key to these efforts, insurers concur, is to formulate a sharper focus on customers so producers can optimally engage them in cross-selling opportunities.

State Farm's NAQ, for instance, contains 12 diversified questions that drill down to identify customer needs that the customer may not even be aware of.

The questions embedded within the NAQ help determine what Kiley calls a customer's financial roadmap. The roadmap would identify if a customer wants to acquire products that provide protection against losing a home to foreclosure-or protection in the event they cannot pay their bills, for example.

All hands on deck

Ascertaining customers' needs hinges on an insurers' ability to arm agents and brokers with tools and technologies that better support customer profiling via sophisticated analytics. It also hinges on their ability to provide tools to enhance agent workflow requirements via systems integration and dynamic front-end interfaces.

However, many insurers indicate other integral factors drive cross selling. The effort indeed requires teamwork among groups within an organization, such as contact center representatives who work with agents in delivering referrals on potential opportunities.

Often, the teamwork is built on a reciprocal relationship. At the call center level, insurers have made it a priority to grow the customer "market basket" by ensuring their CSRs are trained to be on the lookout for cross-selling opportunities when talking to a customer. Once identified, a CSR can proactively sell a product or service on the spot, or pass a lead on to an external agent for follow-up.

At Lincoln, R.I.-based Amica Life Insurance Co., sales are carried out by an internal staff via the phone, says Duncan Hannah, assistant vice president, Amica Life. Amica's 50 internal sales agents receive leads from the company's external property/casualty agents, who push potential cross-selling business to these reps after meeting with customers about auto or homeowner's coverages. For example, an external agent may discover during a conversation with a client about a homeowner's policy that the customer is a first-time homeowner without a term insurance policy. That agent would then pass the lead to Amica's life agents.

The carrier then builds a prospecting list and launches a direct mail campaign, says Hannah. These targeted campaigns impart to Amica's P&C customers why now might be an appropriate time to explore a universal life policy, for instance.

State Farm has also leveraged-and with a great deal of success-its flagship property/casualty product line to the bank and financial services side of the business. Call center reps are geared to listen for new-business opportunities with P&C customers(see "Contact Centers: The Front Lines of Cross Selling").

In the course of conversation, a customer may make a statement that would indicate the need for a particular financial services-related product. In turn, CSRs pass these leads on to State Farm agents for follow-up.

In addition to cross-functional collaboration, other factors contribute to successful cross selling. Ultimately, agents concede they have to better understand the ins and outs of a carrier's multi-product line-how all the pieces fit together. This requires a higher degree of education.

Springfield, Mass.-based MassMutual offers agents what it dubs MassMutual University, a Web-based program that enables agents to tap into resources about specific insurance and investment products to more effectively cross sell.

The university provides agents with various "chat rooms" where they can interact to share ideas and strategies about the various scenarios that may arise within a client consultation. In addition to the online university, MassMutual supports agents with other resources from its Web site located at

Higher learning

Many MassMutual agents so far have regarded the site's resources as invaluable. "I have almost 800 clients of all types, and many are college-educated," explains James Tsakopulos, a partner with The South Texas Agency, San Antonio.

"But when it comes to understanding how to maximize their insurance and financial portfolios, many people are really in the dark," he says. "It's amazing what education can do. For instance, many people might know they have disability income coverage through their group insurance plan, but they don't have a clue about the specifications of the plan."

Tsakopulos, whose agency oversees $90 million in-force insurance business, says some of his clients are under the impression that a disability income policy provides them with much more protection than it actually does.

"Disability income only protects income lost through a disability," says Tsakopulos. "Long-term care, on the other hand, covers expenses incurred from having to hire home hospice or to cover a nursing-home stay. From a cross-selling standpoint, we have a great deal of success selling LTC to people who have disability income because the two products have a synergistic relationship."

Ultimately, Tsakopulos' agency enjoys an 85% closing rate on new products and services after they have conducted a thorough needs analysis on a client, he adds.

The ability of insurers to generate high closing rates when cross selling products will continue to depend on making a solid case for need. In the end, the effort boils down to good, old-fashioned intuition-with an assist from tools and technologies.

"We've used technology to identify cross-selling and up-selling opportunities, but sometimes it's a process of combining technology with common sense," says Gabriel Fuchs, a senior manager, sales and marketing, at La Suisse Insurance Co., Geneva, Switzerland.

"We found that German-speaking residents living in our region are much quicker at paying their life insurance premiums," says Fuchs. "And French-speaking people pay auto insurance more quickly.

"What that tells us is we might be able to up-sell more life coverage to Germans and more auto coverage to the French. But it also provides us with a cross-selling opportunity. A German-speaking customer might be under-served with auto insurance and a French-speaking customer might be lacking the right amount of life coverage. Really, when it comes to cross selling and up-selling, there's a lot of blue-sky opportunities we can take advantage of," he says.

Contact Centers: The Front Lines Of Cross Selling

External agents are known for building long-lasting, sustained relationships with customers-all of which helps fuel cross selling and up-selling.

But representatives that work in call centers are known for engaging customers in a more sporadic fashion-all of which helps promote impulsive cross-selling opportunities.

Madison, Wis.-based CUNA Mutual Group, a provider of auto, homeowners, life, and accidental death and dismemberment (AD&D) insurance products, is using a high-performance database engine from Objectivity Inc., Sunnyvale, Calif., for its credit union member database. Cross selling is part of the equation.

The Objectivity/DB-based application extracts detailed member information from more than 40 disparate systems at CUNA Mutual. "The key element (this investment) has provided for us is an ability to identify individuals and all of the relationships they have with CUNA Mutual," says Ron Marsden, assistant vice president of business systems and operations, member solutions group, CUNA Mutual.

CUNA Mutual recently went live with the database engine at its customer service call center in Waverly, Iowa. For example, a member may call to change their address on an AD&D policy, explains Marsden. "This application enables us to acknowledge other relationships he or she has with us and possibly serve another need related to those other products," he says. "This helps us better understand our total relationship with the customer. We anticipate using it for cross selling much more extensively in the future."

Other insurers are also benefiting from call-center cross-selling activities. In one program supported by a third party, Northbrook, Ill.-based Allstate Insurance Co. is receiving a boost in sales volume for its credit card protection plans. In this program, insurance sales are not a "destination" purchase-credit card activation is.

Portland, Ore.-based LiveBridge, a provider of in-bound call center services to multiple industries, was appointed by Allstate three years ago to sell insurance products through LiveBridge's licensed insurance agents at its Olympia, Wash.-based contact center.

LiveBridge agents field calls from customers who are activating a credit card. As they do, agents pitch credit card insurance plans provided by Allstate. One program, for instance, pays a credit card balance in the event the cardholder loses their job.

LiveBridge CSRs have found that 55% of people they engage agree to listen to the sales pitch for insurance while 17% eventually take the offer for insurance, according to Chris DeLambo, director of marketing for LiveBridge.


Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access