Page 265 - Performance Leadership

254 • Part IV Implementing the Performance Leadership Framework

the business, higher levels of relationships are needed to manage the
cost of claims. Within transactional relationships, there is no incentive
for intermediaries to drive down claim size.

Managing Added-Value Relationships
For added-value relationships different performance indicators are
needed. Insurers can add value by opening up and adapting their
processes for the channel partners. Think of decision support systems
that help channel partners sell the right insurance or allow channel
partners to use the insurer’s direct-marketing capabilities under their
own names and labels.
Insurers obviously need to measure the costs of these special systems
and processes, and weigh these against the competitive benefits and
margins. Particularly when processes need to be customized for spe-
cific channel partners, it becomes important to measure the incre-
mental costs of customization. The results of embedded or adapted
processes should be measured in terms of “share of channel wallet.” In
other words, how much of the portfolio of the channel partner is trusted
to the insurer, because of the convenience of the embedded or adapted
processes. Also, on a more qualitative level, customer satisfaction sur-
veys do not suffice; a council of its channel partners is needed to give
more strategic feedback.
Channel partners have requirements as well. It is important for the
insurer to track those in order to keep the right focus on the relation-
ship. The measures to track how the channel partner requirements are
met are again very process oriented, but aimed at the complete process,
not just the insurer’s part. For instance, what is the average time in the
lead-to-policy process or the accident-to-claim-closed process? These
processes start with the customer, go through the channel partner,
move to the insurer, return to the channel partner, and end with the
customer again, involving possibly multiple customer contact
moments, using multiple customer contact channels, such as the Web,
call center, and channel partner itself.
Particularly in the case of adapting an insurer’s processes for the spe-
cific purposes of a channel partner, the end result should be measured
in terms of cost savings for the channel partner, or in the monetary
value of additional opportunities generated. The measure of success