Yet in a 2006 banking study by Accenture, 93 percent of U.S. respondents said they believe strengthening their cross-selling capabilities will be a key element of future growth. Therefore, while it may not be "converge or perish," insurers that ignore cross-selling do so at their own peril in light of the interest from other financial services sectors. Equally important, the fundamental value proposition of cross-selling makes good business sense.

"Selling to current customers is less expensive than acquiring new ones," says Stephen Forte, senior research analyst in the insurance practice at Gartner. "It certainly can foster greater loyalty. They'll be less likely to leave a company if they have a broad multiproduct relationship."

Most of the cross-selling activity in insurance actually has involved selling multiple lines of insurance, rather than different financial services products, to single customers. "The insurance industry understands the more products a customer has [with one company], the more profitable that customer is. The loss ratio is lower, the value over time is greater," points out Donna Johnson, managing director in financial services-CRM practice at BearingPoint.

Obstacles to cross-selling in insurance are part cultural and part technological. "Effective technology is the greater barrier," claims Edward Blomquist, lead analyst in financial services technology at Datamonitor.

The first and most significant technology challenge involves data, including the need both to clean customer data and, via various approaches to customer data integration (CDI), to get a single view of a customer's relationship with the company.

Data cleansing involves dealing not only with "bad" customer data and creative user input in individual systems but also the problem of different data formats and structure among systems. "The primary [obstacle] is how you identify customers and identify them well. Each system has different identification strategies," says Johnson.

"They don't have one system that has a common architecture and data model," says Forte. He reports figures from a December 2004 Gartner study on data management in insurance remain valid: Only 25 percent of life companies and 23 percent of P&C companies had created consolidated customer profiles for use in cross-selling efforts.

When South African insurer Sanlam Life looked to replace a customer database with a new data repository based on Siperian's Master Reference Manager, it needed to address the issue of differences in data from 30 different systems that had led to the existing database's being only 70 percent accurate.

According to Siperian (a Sanlam spokesperson could not be reached by press time), a rules-based match-and-merge feature in the Siperian system allowed Sanlam to address accuracy at the individual cell level by assigning "trust factors" to data. A data steward might establish a rule that, for instance, addresses in one system always are more accurate than addresses in another but that phone numbers are most accurate in a third system because of how those systems originally captured customer data. Or the Siperian system might select data from different sources based on trust factors such as how current information is.

Whatever data can't be matched automatically is reviewed by a data steward. In the initial rollout of the new customer data repository, Sanlam was able to identify and either merge or eliminate 100,000 duplicate or invalid records.

At Principal Financial Group, an "affiliate database" serves as the foundation for several systems that come into play in the insurer's cross-selling strategy. The database, built on a service-oriented architecture (SOA) framework, goes beyond extraction and integration of existing customer information and adds data on agents and prospects, as well.

"In the affiliate database, we brought together information about all our customers across all our lines, and all our marketers across all our channels, and built a service layer around that," says Gary Scholten, senior vice president and CIO at Principal Financial Group. The affiliate database feeds a customer contact application, which originally was built for Principal's call center in 1998 but since has been extended enterprisewide to other staff and agents. "The affiliate database really is the key to our seamlessness in our call center and marketer-facing applications," Scholten says.

Additionally, the affiliate database feeds an enterprise data warehouse Principal uses for customer analytics and the development and management of cross-selling and up-selling opportunities. "The SOA framework on which the database is built has been critical to the speed and ease of integration, and it's why [SOA] is a component of our enterprisewide technology architecture," Scholten says.

A centralized customer data management strategy is the basis of Zurich Financial Services' cross-selling strategy, which targets large "corporate" customers that operate in multiple countries and have different lines of business, such as property, liability, and workers' compensation.

Zurich's customer data man-agement is supported by a consolidated customer database, which originally was developed and deployed for the carrier's European business four years ago. Andrew Freeman, global market manager in Zurich's global corporate business division, indicates as the company launched and implemented a new cross-selling strategy in the fall of 2004, a key first step was to extend the database to a worldwide user base.

"It isn't unusual to deal with 25 to 30 people all over the world who have regular interaction with a customer," Freeman explains. "It's critical everybody be able to access the same information." Zurich will extend the reach of its data management system initially to the U.S., followed by Asia Pacific and Latin America.

One of the key elements to the system is a visual display of consolidated customer information. (Citing the competitive advantage of the system, Zurich would not divulge specific products in the customer data management platform.) "We can pull up a map, showing all the different lines we have in force, as well as lines that are in the pipeline, with customers by both region and business," Freeman says. To collaborate globally on account cross-selling with internal staff and agents, Zurich uses Lotus QuickPlace to conduct e-meetings.

Carriers also struggle with what to do with customer data even when they are successful integrating it. "Knowing" customers is not the same as "understanding" them: what their current and prospective needs are, whether they're likely to buy, or whether–based on the insurer's experience with the customer, i.e., losses–a company even wants to sell them additional products.

Ultimately, carriers still need to turn data analysis into action, either by applying data mining and other business intelligence strategies to identify trends and to support targeted marketing campaigns or by building event-driven alert routines into call center systems to prompt staff to pursue cross-selling or up-selling activities. "Companies [just] are beginning to use techniques that track event changes–such as when another car is insured, when a child comes of driving age, or when a new house is purchased–to initiate calls on other lines of coverage," Blomquist says.

Furthermore, it's not simply a matter of throwing a new cross-selling system over the transom to the sales staff. Different financial services products–even different insurance products–require different skill sets to sell. Forte illustrates the problem with an example of trying to cross-sell P&C and life insurance. "The only product in life insurance that's comparable to P&C is term life. But most life products are complex, and training people to sell those products requires time, expense, and licensing," he says.

Finally, after a company has cleaned and consolidated customer data, generated sales leads and campaigns, and turned the results over to the sales force, it needs to track the effectiveness of its efforts. In 2005, Zurich enhanced its internally developed customer management systems specifically to enable tracking cross-selling and activities in which there was collaboration between multiple parties in two or more business units.

"We recorded several hundred new business successes involving people in more than 12 countries attributable to cross-selling" in 2005, Freeman reports, which helped the company exceed its cross-sales target for the year by 18 percent.

The challenge of what to do with customer information is particularly acute when an insurer deals with independent agents or brokers. No matter how good a job the carrier does putting together customer data or how compelling its marketing campaign, it can't choose what company agents place business with. Therefore, independent-agent carriers take an indirect approach to cross-selling.

"There are incentive strategies they can use, but primarily, they look for ways to be the easiest company to do business with," Johnson says. "They are looking for ways to extend their technology toolkit and services and improve the ease of getting information into their organization and out of it, so that the independent channel wants to work with that company and thinks of it as other opportunities come up."

Ultimately, however, independent agency carriers still are at the mercy of their agents to carry out any cross-selling plans. "Agents own the customer relationship," Blomquist says. "I am not convinced independent-agent carriers will be able to have successful cross-sales because of the fragmentation in their distribution."

Technology issues combine with cultural challenges within insurers to complicate cross-selling efforts. The main cultural issue is companies that have multiple products have tended to set up business silos for those products just as they had technology silos to administer them. As a result, "there are internal cultural challenges around who owns the customer and who has access to the information," Johnson says. "One department doesn't want any other to cross-market without its permission, or it may not want to share the information at all."

Breaking down those barriers has to start from the top. "You have to communicate to people this [cross-selling] is something we're going to spend time on even though it isn't going to hit 'my' books," says Zurich's Freeman. "This isn't the first time we've dealt with [cross-selling], but the key for us at least this time is having strong executive management support from our CEO down through our business division executives."

Principal's cross-selling strategy, which the company calls "relationship broadening," targets small and medium-size companies. Implementing the strategy has led not only to the aforementioned technology developments (the affiliate database, customer contact application, and enterprise data warehouse), but it also has helped break down organizational barriers.

"If your strategy doesn't drive you toward cross-selling, it's hard to take on the expense of large CRM or data-quality initiatives," says Scholten. "At Principal, all departments, including IT, very much have a seat at the management table and have influence. That is important in cross-selling, because when you have different business processes and deal with customers across multiple channels, the place where that's visible first is when you're trying to bring systems and data to help support new cross-selling processes."

Principal's strategy has resulted in changes at the product level, too. The company created a "bundled" product, called the Total Retirement Solution, which combines 401(k) plans, defined benefit pension plans, nonqualified retirement programs, and ESOP plans under one wrapper.

"In the marketing channel, by bundling, you get in the door or demonstrate [to agents] they will get a piece of a sale they wouldn't get otherwise as opposed to flinging different products out there and hoping you generate some interest," Scholten says. "Almost half of our individual sales in 2005 were the result of our relationship broadening–not just cross-sell but co-sell [multiple products in one sale] and up-sell. Sales of the Total Retirement Solutions product in 2005 also doubled over the previous year."

It's not just the culture within the company and the lack of control over the agent insurers have to contend with–it's the attitude of insurance consumers, as well. First, when it comes to cross-selling among different financial services products, consumers simply are used to buying different products from different providers–insurance from insurers, investments from brokers, and mortgages from banks. Second, like it or not, insurance often is a price-driven decision.

"The key factor in the purchase of insurance, particularly in personal lines, remains price, especially in car insurance because it makes up a larger proportion of people's income," Blomquist says.

To combat price-driven customer fragmentation, "you have to create value through technology for customers so they want to have and keep a relationship with you," Scholten contends. For instance, to deal with the issue of losing individual customers when those individuals quit an employer with a Principal-provided plan, the company deployed a Web-based rollover application in 2002 in addition to its previous phone-based method. The goal was to deliver a one-visit rollover process where applicants could complete forms and e-signatures online rather than having to wait for forms in the mail, as is the case in the phone-based process.

"We wanted to create an experience where the member sees staying with us as simpler and having more value than taking those assets somewhere else," notes Scholten. Individuals can complete the rollover entirely independently online or in connection with a call to contact center staff who have access to the same in-process data customers are seeing. The retention rate of individuals using the Web-based rollover system is 75 percent compared with 50 percent who use just the phone-based option.

But for all the customer-focused systems a company might provide, technology is ultimately only an enabler for retention and sales, including cross-selling, and not a total solution. "Billing, customer service requests, policy changes, and particularly, claims handling must be done consistently and effectively to establish a carrier as one customers will want to do more business with," Blomquist asserts.

"The minute you have a claim and something goes wrong," concludes Forte, "that customer goes somewhere else regardless of how good a job you did on the technology side."