Insurers have an advantage over other kinds of companies because of the volume and quality of data they have on their customers. Brookner listed four steps that insurers should take to improve the use of those data. First, cleanse them. Make sure the proper customers can be identified from the data. Second, Get the data integrated from different business units so you can have an enterprise-wide view of the customer, he said. This means overcoming rivalry issues between the business segments. You cant cross-sell or up-sell without that enterprise view, Brookner said.

Third, examine your business processes. As Brookner put it, Let the people who need access to the data have access to itwithin the boundaries of customer privacy.

Fourth and finally, establish business rules to trigger a way the data can be used. If a customers history shows he buys a new car every three years, that should trigger a letter to the customer in advance, informing him of financial or insurance products your company may offer, Brookner said.

All companies need to know who their valuable customers are, but they also need to know who the below-value customers are and how those customers should be treated. Some businesses dont want to get rid of them, but you have to ask yourself how far below value youre willing to go, Brookner said. First, youve got to determine the reason theyre below value. Is it because theyre taking their best business to a competitor? Or is it because theyre just not buying any products?

There are legal and ethical issues involved in dumping such below-value customers, so be willing to do a little work before you send out the pink envelope. Brookner points out that the Internet is a terrific tool to use to find out more about these customers. The majority of customers are willing to give carriers a great deal of information if you only ask them for it, he said. They have to be reassured why youre asking, though.

Personalizing those customers through the Web site can be valuable. One company working on that is New York Life. Its Web site gives a personal folder to each customer, and gives the company and the agent the ability to add items to that folder. Data acquired on the customer allows the company to tailor information to him, said New York Life vice president Ken Hittel. (Potential customers dont have to be scared off by this personalization, either. Visitors can choose to use short-term session cookies during the personal-folder creation process.)

Brookner points out that privacy statements are required by law, but insurance carriers need to go beyond those often-simple requirements and explain what the company is doing to protect the customers privacy. You can give them the legalese, but you can also have a summary of what you do and dont do, he said.

Insurance, with its three-way, carriers-agents-customers relationship, is unique. Carriers have to show the customers that they and the agents are there to help. Bypassing one part of the chain is acceptable in some areas, such as data collection, but its important that the customer feel well served, as Brookner put it. Our data show that the customer will be more loyal if the service is personalized, Brookner said. Customer service is important in building loyalty, but most customers choose a relationship over service. ROBERT REGIS HYLE