The attention of many of the financial
conglomerates like banks and finance companies has now
been diverted and directed towards the insurance sector
which has made the insurance industry, a happening industry.
Strategic analysts and actuaries strive towards conducting
business in a new fashion adopting new techniques to meet
the challenging environment. With the convergence and consolidation
within the financial sector, insurance is being viewed
as an extended arm of the financial group with bank, mutual
fund, housing finance being the others in the fold, leveraging
on their strengths, expertise and loyal customers.
With the changes in the competitive landscape
of modern days, insurers have become more customer-focused.
Lot of discussion is happening around Customer Relationship
Management (CRM). It is more encouraging to note the emerging
CRM activities in the insurance sector. But another CRM
must also be given equal weight, which is customer risk
management. Customers are viewed as assets, but in this
competitive age, they can be better viewed as volatile
assets. Like within assets, there are non-performing assets,
within customers also, there are some non-performing and
risky customers. Customer Risk Management is about managing
the customer risk and also building the relationship capital.
Relationship capital can be defined as the sum of the knowledge,
experience, and trust a company can count on from its policyholders,
employees, and distribution channels. This article discusses
the factors that lead to customer risk, CRM and usage of
business intelligence systems in managing the same.
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