Part In India Essay, Research Paper

Each of the three types of relationships implies a general class of product offering. The transaction-based relationship implies a single product; the technical advisory relationship accompanies product and service bundles; and partnership involves a theme-based array of products and services that change according to the customer’s stage of life. By this yardstick, the Insurance business is a typical case of the partnership-based approach. Any good agent would keep track of his client’s evolving needs by considering his age, income, life events etc. However, a major limitation of the partnership role has been the number of people that each agent can handle—it is simply a matter of scale. With the help of technology, insurance firms can find ways to expand the number of people that can be reached, deepen specific targeted relationships, and lower the cost of working with additional constituencies. The appropriate strategy for a business like insurance is therefore personalization – catering to the segment size of one. The traditional distribution channel for insurers – the agent, has always provided personalized services. While cost imperatives have forced insurers to look at alternative direct selling channels such as the Internet, the agent’s strategy of personalization needs to be replicated across the new channels.

Figure 1: Customer relationship strategies as function of the nature of product.

The above stated theory, of personalization being a critical factor for success in the Insurance industry, is borne out by surveys conducted among consumers and insurance industry executives. In the year 2000, Delloitte Research conducted a study of the requirements of consumers of financial services across ten countries in North America, Europe and Asia Pacific. The study covered Insurance, Banking and Investment services. For all these services, the consumers were asked to rate the following in order of importance:

? Price of the service

? Variety of Products

? Customer Service

? Advice

? Reputation of the service provider

? Delivery Channels.

With respect to Insurance the key findings of the study were:

? The attributes of consumer service – being treated as a valued customer and responsive service – were rated as highest in stated importance by consumers

? A strong reputation was high in stated importance

The above findings were applicable to all countries surveyed, even though consumers in different countries and different priorities w.r.t. the rest of the factors studied. It was found that the consumers were most concerned with the quality of their interaction with the service providers. This was further borne out by the comments of insurance executives – “Customers want to be seen as individuals. They are looking for both faster and more customized service.”

The findings by Delloitte conclusively establish the importance of providing a personalized experience to consumers in the insurance sector. At the same time, the cost imperatives would imply that this initiative would have to take the form of web personalization.

4 FRAMEWORK FOR PERSONALIZATION STRATEGY OF AN INSURANCE FIRM

Figure 2: A Framework for Implementation of Personalization

The above framework would help the insurers to

? Segment their consumers

? Map appropriate content for their consumers.

Profitability refers to the amount of revenue that a customer is generating for the insurer. Potential refers to the possibility of future business with the client. For this the insurer needs to have enough information about each client in order to calculate the ideal insurance cover for that client. Clients whose current levels of insurance are less than their ideal levels can be considered to be having potential.

The insurer should also be able to track those clients who are currently neither profitable but are expected to become high net worth individual in the future. These consumers would be considered as high potential clients and hence it is important to establish a relationship with them even if they are not profitable at the moment.

While this document suggests several personalization options that are available to insurers, it is for the insurer to decide the relative costs and benefits of each of these options and to accordingly decide which facility to offer to which segment of consumers.

5 PERSONALIZATION ON INSURANCE WEB SITES

Personalization of insurance web sites would involve providing the following features:

5.1 General information about company, Insurance concepts, company products, procedure details, Faq’s etc

All this content needs to be assigned attributes; each object on the web page should be associated with a few target segments, based on age, income, life event, profession, awareness levels etc. The level of detail that should be given to each segment should also be decided.

5.2 Newsletters

Newsletters are a useful means of attracting repeat visits to the site. The content of these newsletters should be personalized and should be according to the users stated preferences.

5.3 Calculators & estimators

Most insurance web sites provide calculators to estimate the user’s insurance needs, the amount of disability cover, health cover, education costs etc. However, the potential for personalization of these tools is unexploited. It is therefore proposed that the results of the calculations be stored for each session. Whenever the user logs in, his previous calculations should be retrieved and the details that the user entered last time are shown. The user should be asked whether the details provided by him last time are still valid. If the user desires, he could change the data that he had input the last time and recalculate.

5.4 Agent Locators

These are tools that help to locate the agent nearest to the user. Similar to the calculators, it is recommended that the details of the previously located agents be saved. On login, any changes in the location of the user’s agent, or the details of any new agent who is located near the user’s residence be flashed.

5.5 Tracking life events

Important life events have a bearing on the insurance needs of consumers. Examples of important life events are – marriage, birth of child, children growing up, acquiring a car, buying a new home, contracting a major disease, retirement, death of spouse etc. The insurer needs to be aware of the events in the life of its consumers and target appropriate insurance products at them. Life events therefore provide good opportunities to cross sell / up sell. The possible sources of this information –

? Intimation by the consumers’ themselves.

? Click through analysis

Intimation by users themselves: the users should be provided the facility of editing their own profile.

Click through analysis: If the user begins to regularly access content that is related to a certain life event, the system should respond by changing the user’s profile to include the information about the life event.

5.6 Cross selling / Up selling

The insurer should try to build each consumer’s financial profile (info. On property owned, age, health status of self and family members, profession etc.) This would help to determine the required level of insurance and the need gaps of the consumers. Appropriate promotional campaigns could then be targeted at the consumer. Any change in the consumer’s profile could also be considered as a trigger to target new products at the consumer.

5.7 Account updation for users

Instead of waiting for the user to change his account details on his own, the insurer should try to detect, using click through analysis, any changes in the user’s profile. If any major changes occur, the site should pop a question asking the user to confirm these changes.

5.8 Anticipating the financial future of the clients

The insurers should try to identify potential high net worth individuals. The consumer’s educational background or business prospects could be a good indicator of the person becoming a star client in future. The insurer should offer more personalized service to such clients, even if they are not very profitable at the moment.

5.9 Ask for referrals

Ask customers for referrals to other potential clients. In return, offer greater personalization to customers. The insurer can also offer some sops \ discounts to these customers.

5.10 Human Interface

? Chat with agents: Consumers could be provided the facility to chat with agents during the selling process

? Push To Talk: ITXC’s ‘Push to talk’ integrates telephony into e-commerce sites, coordinated with browser sharing between site visitors and customer service agents. Push to Talk lets surfing customers initiate a phone call from a PC without interrupting their Internet session and establish an immediate call with the sales representative when talking to them over a traditional telephone connection. The user does this by simply using a button that is provided in the e-mail. Besides, the technology allows the call center agent to ‘push’ appropriate web pages for the client in real time. The technology could be immensely useful for providing sales force automation capabilities across the net. It’s delivered as a hosted service, with minimal in-house installation and no up-front technology purchase. The Push to Talk service can be used on e-commerce Web sites, e-mail messages, banner advertisements, directory listings, or for sales lead verification and fulfillment. Push to Talk functionality can be added to a variety of e-mail marketing tools, including newsletters, announcements, personalized messages, and automated or customized customer support responses.

? Webex: Helps to conduct online meetings using presentation and collaboration tools. Relevant only for selling to higher end consumers. The WebEx Meeting Center integrates audio, data and video to provide an on-line meeting room that simulates the full spontaneity of face-to-face meetings. The WebEx Meeting Center can be fully integrated into websites allowing end-users to participate in any size of meeting anywhere, at any time, from any web browser or telephone. WebEx Meeting Center features include Application Sharing (enables participants to run any software application on their desktop and have others view and optionally control the application.) and document sharing (allows meeting attendees to jointly view any document or graphic independent of the software applications). A possible use of this facility is while adding riders to a policy. The customer and the underwriters can simultaneously work on the same legal document without having to meet.

6 SERVING PERSONALIZED CONTENT

Content for each user shall be decided on the basis of the following factors:

? Profile

? Profitability

? Potential

6.1 Profile

A user’s profile is the set of attributes that describe a user. These attributes are:

? Age

? Income

? Sex

? Marital status

? No. of children

? Profession

? Educational background

? Net assets owned

? Details of Insurance policies owned

Appendix 3 on ‘Consumer behavior in Insurance’ details the effects of each of the above-mentioned attributes.

6.2 Profitability (or User status)

Users could be classified according to their current status w.r.t profitability, i.e, whether they are strangers, account holders or customers.

6.2.1 Stranger

A stranger is an unidentified person, who does not have an account. No personalization is possible for this person. All visitors, therefore, get a common view of the site. The objective of the site, at this stage is to hold the attention of the visitor, and try and persuade him \ her to open an account and sign up for the newsletter. Tools/Calculators, agent locators as well as some content about insurance basics and product features could also be provided at this level, but each page shown to the visitor should have an offer to sign up for the account/newsletter displayed prominently.

6.2.2 The transition to account holder

The process of opening an account would involve filling a questionnaire, and building a profile based on that. This profile would then be shown to the user and verified, using a series of true/false questions.

6.2.3 Account holder

A site visitor who is an account holder should be addressed by name by the site after he\she logs in (Some sites use cookies to identify a user, and address the person by name the moment he comes on to the site, without requiring a login. However, the user could easily delete the cookies, or some other person might be using that machine. Hence, the author is not recommending the use of cookies. Using the user id to identify the user is preferred.)

Every account holder should be offered an information manager. The information manager should provide the users with relevant content, as well as ask questions to the user for further profiling.

The account holder should have access to articles/reports/product promotions that fit his profile. The user’s relevant links should be accompanied by a brief description of the content that they point to. Another option is to display the user’s relevant links in a more prominent manner than other links. At the same time, the web pages for the account holder should have links to the content that does not fit his profile. This is important because any user’s profile is always dynamic – since user interest and preferences keep changing, the user’s attributes are also subject to change. It is therefore important to enable the user to have access to all the content that is of interest to him. This would also help in lending a dynamic character to the user’s profile on the web site. If the user displays a consistent interest in content that is outside his profile, the click stream analysis would help to alter his profile and help to create a new profile that describes the user’s interests better.

A record must be maintained of the account holder’s visits to a site. If some account holder is found to be absent from the site for a prolonged period, an email should be sent to him, informing him of the new offers for him or providing links to articles on the site.

6.2.4 The Transition: the quoting process

Depending on the size of the policy, the user could be offered automated quotes based on a questionnaire, or could be offered a chat with the agent before the quote is made. For the higher end clients, the ‘Push to Talk’ facility could be utilized to get the client details and to make the appropriate quotes.

6.5 Customer

The customer is a person who holds a policy with the firm. For the customer the web site should provide, apart from the facilities available to the account holders, facilities to track the status of their policies.

A policy manager should be provided to the customer. The policy manager should offer the following features:

? Alerts for premium payment. The alerts should be available via email as well as on the user’s personalized home page.

? Recommendations for scheduling premium payment, switching policies, changing amounts etc.

? Informing the policyholders of the possible riders.

? For unit-linked policies, the policy manager could offer information and advice on the performance of various sectors of the economy, and which sector offers the highest returns.

? Facilities for on line claims filing and tracking.

? Filing and tracking requests for change of policy / modifications etc.

? Facility for initiating online chat \video conferencing to service representatives.

? Ask for referrals. Offer benefit for each referral by the user.

6.3 Potential

The account registration process also includes questions that make it possible to judge the potential of a user. The following information is needed:

? Educational \ Professional Background

? Size of business

? Net Assets owned Vs insurance policies already bought

? Family history – whether the family has a record of dealing with the insurance firm.

Users with high potential should be eligible for more personalized and detailed content and facilities.

It is suggested that within the major User levels of visitor, account holder and Customer, several sub levels be maintained to account for user potential.

7 FROM STRANGER TO BUYER – A WALKTHROUGH

Before a site visitor becomes a buyer, the visitor goes through several stages- from a visitor to an account holder to customer, with the intermediate stages of registration and asking for a quote. The site would provide different views to different types of users:

7.1 The First Time Visitor – Stranger

The first time visitor would be provided the following:

? Product Information links

? Insurance FAQ’s

? Invitation to be a registered account holder

? Links to insurance fundamentals

? Links to calculators \ estimators \agent locators

? Links to the insurance game

? Company info, Contact addresses, Site map, privacy policy etc – standard features on the main menu

7.2 The Registration Process

Present a questionnaire to get the following information ( * questions are mandatory). Request the visitor to fill up all details so that the site can be personalized more effectively for him. The newsletter would be sent to all account holders. It is important to guarantee the confidentiality of the information given by the user.

? Name *

? Age *

? Email id *

? Sex *

? Marital status *

? No. of Children *

? Educational Background *

? Professional Background *

? Location – residence and workplace

? Annual income

? Net Assets owned

? Investment portfolio

? Insurance policies already bought

? Areas of greatest concern * –

? Retirement savings

? College expenses

? Aging parents

? Family’s financial security

? Getting the right investments

? Life insurance

This questionnaire should be followed by a small quiz to judge the awareness level of the user with regard to insurance and investment matters. This questionnaire should not be mandatory. The results of this questionnaire shall enable the web site to classify the user as a Novice \ aware \expert. The appropriate level of detail in insurance related articles could therefore be displayed. (In case the user does not answer the quiz, he should be considered a novice)

The User should then be offered links to various calculators. Some of the calculators offered could be:

? Life Insurance needs calculator

? Education cost calculator

? Mortgage protection calculator

? Disability protection calculator

? Tax deferral calculator

? Estate tax calculator

The results of these calculators should be saved for future reference. The calculators would require information about the user’s income, net assets, and policies bought. The user would have to provide this information in case he has not filled up these fields in the original questionnaire.

All the information gathered by the questionnaire and the calculators would constitute the users profile. The results of the calculation would indicate the users’ unfulfilled insurance needs and this information could be used to make appropriate offers to the users.

7.3 The Account Holder

After login, the account holder’s view should consist of the following links relevant to the user’s profile:

? Articles explaining the need for insurance for the age \ income segment that the user belongs to.

? These articles could be tailored according to the user’s awareness level.

? Articles dealing with the special concerns expressed by the user.

? Links to any old quotes that the user had been provided.

? Links to the results of the insurance need calculations performed by the user.

? Life event based article: Given the user’s profile, it is possible to estimate the life events that are likely for the user in the near future. (E.g. An unmarried user in the age group 20-30 is likely to be married in the near future, a married user without kids might be planning to have a child, a person in his mid 30’s with young children might be thinking of acquiring a house or financing his children’s education). Articles focusing on the insurance need arising out of such impending life events should be provided to the user.

? The Discussion board service should available to the user, where the user can post queries \ interact with other policyholders.

? Other resources should also be available to the user, but the above-mentioned links should be displayed more prominently or with a brief summary of their contents.

All the above links should be presented by the ‘information manager’- which could be an animated figure.

The information manager should be able to pop relevant questions from time to time, in order to acquire more information about the user’s profile. E.g.: if a single user has often been using a link related to marriage, the information manager should pop a question asking whether the user has \ is planning to get married. Any answer in the affirmative should result in a change in the user’s profile. In other words, a choice by the user that is contrary to the user’s profile, and is observed repeatedly should also result in a question being popped.

7.4 Providing a Quote

Quotes could be provided in the following ways:

? Online quotes

? Through Email, after an on line registration for a quote

? Through the agent

What method to use for the quoting process is a decision that depends on the overall strategy of the insurer. However, this document assumes that the quote is delivered online.

Much of the information required for producing a quote has already been acquired during the registration process. Some more information regarding health status, smoking habits, driving record, military service record and family’s health history is asked at this stage in order to provide a quote.

During the process of delivering a quote, a user may have some doubts or might have certain special needs. For these, the user must have access to FAQ’s. If the FAQ does not provide the user with a satisfactory problem, the user should be given a facility to post a message on the bulletin board, addressed to the insurance company’s staff asking for clarifications to whatever doubts the user has.

If the User is judged by the web site to be having high potential, the facility of Chat with an underwriter \ service personal should be provided. As recommended earlier, insurance firms could also consider providing premium customers with the Push To Talk facility, using which the user can have an enhanced interaction with the insurance firm’s employees.

All policy buyers, whether offline or online. Should be given a username and password to enable them to use the company web site. An account should be created for these users using the data that they would have given to their agents.

(The document assumes that no on line sales transactions are happening. The act of selling the policy is primarily offline, owing to legal hurdles).

7.5 The Customer

The customer should be provided all the facilities that the account holders have. Apart from this, the customer should have access to the ‘Policy manager’. The ‘policy manager’, like the information manager, would be an animated figure. The following services would be available through the policy manager –

? Alerts for premium payment. The alerts should be available via email as well as on the user’s personalized home page.

? The customer’s insurance needs should be constantly analyzed, and the need gaps that are served should be addressed by providing appropriate offers to the customer. These offers should be recommended to the customer as soon as he accesses his personalized home page. The offers could relate to buying new policies or making changes to old ones.

? Recommendations for scheduling premium payment, switching policies, changing amounts etc.

? Informing the policyholders of the possible riders. This is especially important if some life event is detected. Most important life events involve the need for a new policy or for making changes to the old one.

? For unit-linked policies, the policy manager could offer information and advice on the performance of various sectors of the economy, and which sector offers the highest returns.

? Facilities for on line claims filing and tracking.

? Filing and tracking requests for change of policy / modifications etc.

? Facility for initiating online chat \video conferencing to service representatives.

? Online changes to the policy documents: this can be done using the Webex technology. A virtual meeting between the client and the underwriters can be arranged and the requisite policy changes made. However, given the costs involved, this service can be offered only to higher end customers.

? Ask for referrals. Offer benefit for each referral by the user.

(Of the above features, the recommendations related to online filing and tracking of claims / policy changes require extensive integration and automation of back end processes. Therefore the implementation of these recommendations is contingent on the overall level of workflow automation that is prevalent in the insurance company. However, the author believes that the rest of the recommendations do not involve similar issues and can be implemented even if the web site is isolated from the company’s backend systems. )

8 THE USE OF CLICK THROUGH ANALYSIS

While the users stated preferences could be captured by the means of simple questionnaires, it is also important to analyze the behavioral traits of your users in order to gain insights into their stated preferences. A typical example would be a user’s risk orientation – it is not possible to judge the sort of risk return tradeoff that a user would prefer by studying their profile or by asking them directly. This information would be needed while recommending variable return policies (unit linked schemes), where the policy is more of an investment instrument that a life insurance policy. According to all the insurance agents who were consulted by this author, each socio-economic segment contains people with varying risk preferences. The agent’s approach is to offer a range of policies that the client can afford, and let the client choose on his own. However, over a period of time, the agent becomes aware of a user’s risk orientation by observing his buying behavior. Similarly, the web site should be able to ‘learn’ the user’s behavior by observing the user’s online behavior. A useful tool in this regard is web traffic analysis.

The author suggests assigning a neutral risk category to each new user. At the same time, each cash value policy should also be rated in terms of the level of risk involved. The user’s rating should change according to the risk rating of the policies that are bought. Besides this, if the click through analysis indicates that the user is interested in policies with a certain type of risk profile, adequate changes should be made to the user’s profile.

Apart from this, the click through analysis also helps in fine-tuning the profile of the user. It can also be used to detect changes in the profile of the user and to detect any life event that is occurring for the user.

The three main objectives of the click through analysis are:

? Gathering and interpreting behavioral information.

? Fine tuning the existing profiles.

Apart from being an aid in personalization of the site, web traffic analysis offers a mechanism for measuring the effectiveness of the web site.(see Appendix1)

9 A LOGICAL ARCHITECTURE FOR PERSONALIZATION

A logical architecture for implementing personalization can be represented by the following diagram:

The proposed architecture for personalization involves the use of the following terms:

? User: Any visitor on the web site

? User Attributes: The characteristics of a user – namely age, income, sex, profession, educational qualifications etc.

? User Profile: The set of attributes that describes each user constitutes the profile of the user.

? Segment: represents a group of user. Each segment is a set of profiles.

? Level: Each user is assigned a level. The level is a representation of the profitability and the potential of a user. Major levels are visitor, account holder, customer and evangelist. Within these, sub levels could be created.

? Web object: these are the objects that constitute web content. The objects could be a web page / document/ links on a page etc.

? Object \ Content attributes: these are the characteristics of the object that decide whether a particular user shall have the privilege of using those objects or not. These attributes would be segment and level. Each object could be assigned to several segments and levels.

The ER diagram

10 THE MODULAR ARCHITECTURE

The Personalization solution would consist of the following modules:

? Profile builder: this performs the following tasks:

- Ask the user appropriate questions which would help in preparing a user profile.

- Update the user’s profile on the basis of the click through analysis performed by the tracking system

- Determines the users potential, current status and assign a level to the user

? Segment builder: add, update and delete segments

? Content Mapping: assigning segments and levels to objects

? Personalization engine: associating users with web objects at run time and deciding what is appropriate content for each user.

? Tracking System: The user tracking system keeps track of where a user is and also possibly where a user has been on the site. The URL rewriting technique is recommended for reliable tracking.

11 ISSUES FACING PERSONALIZATION ON INSURANCE SITES

Any personalization effort on an Insurance web site would e faced with the following issues:

? Low frequency of user visits. Therefore need to generate stickiness.

? Privacy issues. Available standards to be explored.

11.1 The Stickiness Issue

Insurance sites are at a disadvantage compared to other financial services’ web sites. Simply put, the frequency with which a consumer buys insurance is much less than the frequency with which the consumer deals with the bank or buys stock. Which implies that the frequency with which the consumer may visit an insurance web site is much less than a banking site or a brokerage site.

Personalization may not be fully exploited if the site is not able to attract users frequently – the whole idea behind personalization is to try and predict the user’s preferences before the user can himself inform the site – this is done through an analysis of the user’s behavior when the user is on the insurer’s site. If the user’s visits are not frequent enough, the site shall present a static view to the visitor.

Some strategies to improve stickiness are as follows:

? An attractive, visually appealing site. An excellent example is EGG insurance – Egg.com is a ‘fun’ site, with witty promos and eye catching visuals. The Metropolitan Life web site (www.metlife.com) has licensed the use of the popular cartoon character ‘Snoopy’ of the ‘Peanuts’ strip from United Features Sydicate. The character is being used as a mascot by Metlife. Currently, most insurance web sites are – dour and dull, and do not register any recall with the user.

? Newsletters: Email newsletters are a useful means of generating repeat visits.

? Extensive use of Emails to overcome the low visitor frequency problem: insurers cannot wait for their clients to log on to their sites, they need to reachout to them. Hence the suggestion to use Email for informing consumers about new offers.

? Devise an insurance game on lines of the stock market games offered by several on line brokers. A well designed game would give payoffs on three fronts:

- Generate stickiness

- Give information about user preferences, on account of the choices made by the players during the game.

- Good educational tool for users

A brief outline of an insurance game – the players are given a certain time span of investment, a lump sum to start with, and a choice of policies. As they go along, several random events happen to them (eg: fall in love and get married, dog bites neighbor, car knocks down the neighbor’s fence – both damaged, distant aunt dies leading to a windfall, the stock market crashes etc). The players can switch/modify policies as they desire. The player with the highest payoff in the end wins.)

? Try and build user communities – provide a discussion board service for site visitors; here agents, policyholders, and potential buyers can interact. Visitors can post their queries that can be answered by the insurance company officials or insurers or other customers.

11.2 The Privacy Issue

Privacy protection is widely understood as the right of individuals to control the collection, use and dissemination of their personal information that is held by others. Central to the concept of privacy are the goals of transparency and fairness. Transparency means that when organizations collect information about individuals they should make known to the individual the information that is collected and how it used. Fairness means that information is used only for the purpose for which it is collected. If the organization wishes to use personal information for additional purposes, it is obligated to obtain the explicit permission of the individual involved.

While personalization promises to be the hook that will lure consumers into a relationship with the insurer, the amount of information about the user that the insurer has raises privacy related questions. The potential problems with regard to the use of consumer information could be:

? Unwanted spam from the insurance company

? Leakage of information related to the client during transmission to the web server or from the database of the insurance company as a result of hacking activity.

? The insurer indulging in abusing the data about its consumers by selling the information to others.

Being a software solutions provider, most of the responsibility for ensuring online privacy for users does not rest with MphasiS. It is the Insurance Company’s responsibility to formulate, explicitly state and implement an appropriate privacy policy. However, the solutions provider does have a role to play in the following aspects:

? Ensuring the security of any personal information that the users provide to the web site. This implies that any sensitive information like credit card numbers should be transferred across secured channels and stored in encrypted formats, in order to minimize the risk of hacking.

? Compliance with the P3P standard. The P3P (Platform for Privacy Preferences) standard attempts to provide a means by which users and web sites can achieve mutual understanding and agreement on the privacy policy of the web site. According to the standards, the browser will be able to interpret the privacy policy of the web site, since it will be implemented in XML. The P3P specification also recommends that any web page that gathers user information should have a distinct privacy policy associated with it. This implies that adequate provisions to comply with P3P standards be incorporated into the design of the web site. (For details on P3P, see Appendix)

12 PERSONALIZATION METRICS

The objective of the personalization effort on an insurance web site is two fold:

? To convert visitors to customers

? To cross sell/up sell to existing customers

In order to fulfill the above objectives, it is important to increase loyalty of the visitors to the web site. This would be manifest as more frequent visits by each user (Time spent by each user cannot be considered – personalization may actually reduce the time spent by each user by quickly giving the user what he desires, rather than the user himself looking for it.)

The following statistics need to be constantly monitored:

? Number of unique visitors

? Frequency of repeat visitors

? Conversion ratios:

- Number of visitors becoming account holders

- Number of account holders becoming customers

- Number of customers making repeat purchases

These could be monitored for all visitors or for segments of visitors, as well as for various features of personalization. Each of these statistics should be subject to comparison with a control sample. This control sample should be from the historical data collected by the insurance company, when personalization had not been implemented. Comparison could also be made with the corresponding data for a competitor’s web site, if possible, especially one that is faced with the same external environment as the insurance company. This would also help to establish benchmarks for the performance of the site.

12.1 Evaluating the content

The system needs to constantly analyze whether the content that had been put on the site is actually fulfilling its purpose. For this, it is important to take feedback from the users.

It is proposed that the articles on the web site be followed by the following questions:

? How relevant did you find the article? (Very relevant\somewhat relevant\totally irrelevant)

? How detailed did you find the article? (Too detailed and complex\ adequate details\too sketchy, more information needed)

The first question finds out the efficiency of the information, while the second refers to specificity. Such an analysis would help to fine tune the personalization effort.

However, it is proposed that not all users be asked for feedback. Instead, within the target segments of each article, the users should be selected randomly for getting the feedback. This is advisable in order to prevent user fatigue.

13 APPENDIX 1 – WEB TRAFFIC ANALYSIS

Proper analysis of Web traffic can help to analyze real motivations and behaviors of customers. Web site traffic analysis is about collecting, analyzing, and interpreting the following data:

? How the traffic arrives at the site?

? Which users make up the traffic?

? How users interact with the site?

? What the results were of the visits — were they happy endings?

The results of the analysis should help to do the following:

? Measure the effectiveness of customer acquisition and retention strategies

? Develop strategies to contain unwanted traffic leakage from the Web site and to enhance the online experience

? Increase the number of happy-ending visits

? Project the likely outcomes of future activities

More specifically, the following are some of the things that can be achieved:

? Changes in traffic volumes may help to measure the impact and reach of the site’s customer acquisition strategies on its online audience.

? Analysis of the composition of the traffic can help with customer segmentation.

? The segmentation of traffic can help to gauge whether the site is attracting the right traffic, and whether the traffic-generation channels, such as affiliate programs and search engines, are driving traffic to the site.

? The amount of interest in the tools, services, and content offered at the Web site may help to enhance the relevance of existing ones — and to design new ones.

? The traffic pattern through the site (also referred to as clickstream data) and the amount of time spent on each page may help to understand the motivations and interests of the online audience.

? Clickstream data can help to offer personalized content to individual visitors.

? Clickstream data can help to understand if visits concluded with a happy ending.

? Analysis of clickstream data can help to improve the navigation on the Web site and contain unwanted traffic leakage.

? Analysis of the search terms people are using in their search engines to find the site, and also the search terms they use within the site, may help to understand what motivates their visits.

? The exit pages — that is, the page the visitors are leaving the site from — may help in understanding if the visit had a happy ending and whether the site can be assured of return visits.

? The pages that people are looking at the most, and the least, may help in understanding the interests of the online audience.

? Past traffic data may help in forecasting the likely outcomes of future activities, such as new-product launches and marketing campaigns.

? Changes in traffic volumes that cannot be explained by internal factors may help in understanding external factors and their impact on your business. These external factors may range from the competition’s marketing push to seasonal activities, such as major holidays and sporting functions.

14 APPENDIX 2: THE P3P STANDARD

14.1 Introduction

P3P 1.0, developed by the World Wide Web Consortium, is emerging as an industry standard providing a simple, automated way for users to gain more control over the use of personal information on Web sites they visit. At its most basic level, P3P is a standardized set of multiple-choice questions covering all the major aspects of a Web site’s privacy policies. Taken together, they present a clear snapshot of how a site handles personal information about its users.

P3P-enabled Web sites make this information available in a standard, machine-readable format. P3P-enabled browsers can “read” this snapshot automatically and compare it to the consumer’s own set of privacy preferences.

14.2 How It Works

P3P enables Web sites to translate their privacy practices into a standardized, machine-readable format (Extensible Markup Language XML) that can be retrieved automatically and easily interpreted by a user’s browser. Translation can be performed manually or with automated tools. This XML file is then read by the browser and compared to the privacy preference that have been set by the user.

A sample P3P transaction might look something like the following – The surfer configures his P3P enabled web browser to say that he does not want to disclose his home address unless he is purchasing a product that will be delivered to his home. When the surfer then connects to a popular news site that requires the disclosure of his home address before he can view content on the web site, the P3P-enabled browser will block access to the site. If other popular news services also require home addresses, the P3P-enabled browser will prevent Joe from receiving news over the Internet. Or he will have to give up his choice to keep his home address private.

It must be understood that P3P on its own does not protect privacy. It does, however, help create a framework for informed choice on the part of consumers. Any efficacy that P3P has is dependent upon the substantive privacy rules established through other processes — be they a result of regulatory, self-Regulatory or public pressure.

15 APPENDIX 3: AN INVESTIGATION INTO THE CONSUMER PREFERENCES FOR INSURANCE PRODUCTS

15.1 Objectives

l To find out what are the factors that effect the consumer’s preferences for insurance products

l To find out how these attributes effect the consumer’s preferences

15.2 Methodology

Interviewing insurance agents and development officers. The interviewees were two life insurance agents, two life insurance development officers and one general insurance development officer.

15.3 The Questions Asked

? What are the types of products that your company is selling?

? What are the major attributes of each of these product categories?

? How do these attributes affect the insurance preferences of consumers?

? What are the various factors that affect the preferences of various buyers?

? Please describe the process of sales?

? What are the various customer touch points for an insurance company?

? What are the various life events that have an impact on the insurance needs of consumers?

? How do these life events impact the insurance requirements of consumers?

15.4 The Results

The results of the study are presented here. These findings would serve as a guide to the personalization effort – they would help to decide the type of content that is to be offered to the customers.

15.5 What affects consumer preferences?

The following customer attributes affect the consumer’s preferences for insurance:

? Age

? Income

? Marital status

? Health status

? Profession

? Educational background

? Number of children

? Risk orientation

Consumer preferences are also affected by the occurrence of the following life events:

? Marriage

? Birth of a child

? A Death in the Family

? Buying a new house

15.6 The Details: Effect of Customer Attributes

? Effect of Age: The consumer preferences changes with age in the following manner:

- 18 to 30 years of age: primary motivation for buying insurance is tax saving. Hence most people invest in shorter-term endowment schemes at this point where the tax saving is maximized. This segment is highly return oriented hence the investment component is more attractive for the than the protection component. Short-term money back policies and the unit-linked schemes are also therefore popular with this group.

- 30 to 40 years of age: children’s money back policies are most popular with this age group. This is so because children’s security and providing for their education is uppermost on the minds of the young parents. This is also the time when most people realize the benefits of life insurance, and hence protection related products are in greater demand.

- 40 to 50 years of age: the people of this age group are concerned about life after retirement. Hence retirement plans are in demand from this segment of buyers.

? Effect of income: Buyers with low incomes prefer long-term endowment plans – these plans provide high returns at low premiums, as well as life protection. High-income buyers are more return oriented – they prefer short term, high return policies. Hence, they have a preference for money back polices. They would also be looking at policies that offer a higher degree of flexibility, since they would like to allocate their investments to the most profitable portfolios. Unit linked policies are therefore popular with this segment.

? Effect of marital status: Married people prefer long-term policies, which have mainly a protection component. They also invest in pension plans. Unmarried buyers, on the other hand, are not too concerned about life insurance-they are more return oriented and invest in short term money back policies or unit linked schemes.

? Effect of number of children: People with large families have been found to prefer endowment policies and children money back plans. However, while these people buy several policies, these policies are usually for small amounts.

? Effect of Risk orientation: It is intuitive that the greater the risk orientation of the buyer, the greater the preferences for the high-risk igh return unit linked products. However, according to agents, risk orientation is a personal trait and is difficult to predict. It is only over a period of time, by observing the buyer’s investment history, that it is possible to figure out the risk orientation of the buyer.

Bibliography

on the other hand, are not too concerned about life insurance-they are more return oriented and invest in short term money back policies or unit linked schemes.

? Effect of number of children: People with large families have been found to prefer endowment policies and children money back plans. However, while these people buy several policies, these policies are usually for small amounts.

? Effect of Risk orientation: It is intuitive that the greater the risk orientation of the buyer, the greater the preferences for the high-risk igh return unit linked products. However, according to agents, risk orientation is a personal trait and is difficult to predict. It is only over a period of time, by observing the buyer’s investment history, that it is possible to figure out the risk orientation of the buyer.