Customer relationship management systems for customer retention in a life insurance organisation in South Africa

Abstract

By examining the role and value of customer retention (CR) in the life insurance sector of the South African insurance industry, this paper seeks to uncover the level of clientele receptiveness and willingness to adopt Information Technology (IT)-based Customer Relationship Management (CRM). Arguably, there are changing client needs, and market erosion requires innovative processes and particularly a readiness to accommodate the swift changes in technology. This volatile environment has, over the past decade, created increased competition and uncertain economic futures, which has placed life insurers under pressure and facing a steady increase in policy lapses. The primary objective of this paper is to investigate the role and value of IT-based CRM potential on customer retention in the life insurance industry in South Africa. It is argued, that with technological advances, increased competition, tough economic conditions, and clients becoming more financially conscious, insurers need to seek further and newer methods to retain their clientele. The study applied a quantitative research methodology by administering existing structured questionnaires to 100 clients at a Walk-in-Centre of a major life insurance company in South Africa to examine the causal link between IT-based CRM and customer retention. The survey concluded that probing unchartered terrain is required in fluctuating times for insurers to be competitive. The implication of the findings is that the speed, at which technology is evolving, is compelling insurers to evaluate new and alternative means of managing client relationships, as clients now drive the economy, not businesses. The very essence of a good CRM programme is its reliance on an IT system innovation, which is advanced enough to analyse the captured client data, transform that data into usable knowledge, which is then used to drive client retention. Explain who will be interested in the findings and why they should care about them. This paper contributes to the understanding, and implementation, of a successful IT-based CRM tool within the life insurance industry