Institutionalizing Strategic Account Management Leadership

SAMA European Conference, ParisMarch 11, 2011

Ron Davis & Rocco MaggiottoCustomer & Distribution ManagementZurich

Copyright @ 2011, Zurich American Insurance Company

Agenda:

Background on Zurich’s Customer Management StrategyWhat is the mandate for the SAM's role, where does it come from? How does the Company institutionalize the support for the SAM role? What framework is the SAM using to establish their leadership and responsibility? How does a SAM gain enough customer understanding to appreciate what creates value for the customer?

What are the metrics or milestones that can be leading indicators of success?

Note that at Zurich, we refer to the SAM role as a Zurich Relationship Leader, or ZRL.

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Introduction

In any organization with multiple businesses and stakeholders, strategic account managers face a number of obstacles in the pursuit of their mission to deliver value and have a meaningful impact on results. These businesses often interact with the same set of customers and prospects, and they often work through common distributors or intermediaries, yet they often act independently. The most successful strategic account managers develop a deep customer understanding in order to align the services and capabilities of their company with their customer value proposition. Through our session today we’ll explain how Zurich implemented a Team Charter approach, which is aimed to institutionalize Strategic Account Management.

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A successful Customer Management Strategy helps deliver the desired customer experiences and drive profitable growth along the entire customer lifecycle.

Acquire Customers

Expand the Relationship

RetainCustomers

Time

Valu

e

“Business as usual” Successful implementation of CMS

More efficient acquisition of new customers

Better Crossand Up-Selling

More efficientcustomerretention

Recovery of potentiallyvaluable customer

relationships

Faster termination of less valuable

customer relationships

A well-executed customer management strategy leads to increased alignment and helps Zurich to consistently deliver on the One Zurich and HelpPoint promises

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Operationalizing the strategy

Common Customer Definition & Language:

Defining common terminology utilized across Zurich by market facing employees

Customer Engagement Approach:

Establishing minimum standards for processes and expected behaviors that help deliver the One Zurich customer experience effectively

Customer Management Methods & Execution:

Identifying best practices to help BUs pursue desired results in a consistent manner across the organization (i.e. ZRL and Team Charter)

Metrics & Measurement

Defining and using customer KPI’s that help measure the effectiveness of market facing activities

Workstreams

Value Proposition

Performance Management

Sales Force EffectivenessCustomer

Common Customer

Definition & Language

Customer Engagement

Approach

Customer Mgmt.

Methods & Execution

Metrics & Measurement

Results: To have a positive impact on profitable growth and

KPIs (e.g.)Customer Satisfaction

New Business Growth

Retention Rates

Product Density (Cross-selling)

How we promote behaviors

How we align

How we track

How we communicate

At Zurich, the mandate for the ZRL role is from our top executives.

Executive Management has to buy-into the establishment and support of the SAM role. At Zurich, the Zurich Relationship Leader role was first implemented in 2000. Even with executive support, it took at few years to gain traction and buy-in from the businesses and key stakeholders.The key to success was demonstrating tangible business results, as well as increasing positive feedback and input from key customers that recognized and appreciated the value-added from working with a ZRL. Recognizing the need for support from all businesses, to help institutionalize the role we created the Team Charter, which helps provide a mandate for the ZRL and Customer Relationship Team across the Company.

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Zurich’s Team Charter serves as a framework for the ZRL to establish their leadership and responsibility

In support of our One Zurich approach for relationship customers and what we believe is a market differentiation for Zurich, the Segment, Business Division CEOs signed off on the Role of a Zurich Relationship Leader (ZRL) and the Zurich Team Charter to reinforce the execution expectations of elements of our Customer Management Strategy We’ve established common processes, which help our ZRLs and customer relationship teams understand their roles and responsibilities, and shape individual customer strategies to drive servicing, develop and pursue new business, and enhance retentionThe Team Charter reinforces our ability to work collaboratively and effectively across business segments, business divisions, BUs, functions and geographies to support and develop these key customer relationships

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The ZRL needs to continually develop his/her customer understanding to appreciate what creates value for the customer Customer understanding and Customer Segment understanding frameworks

help illustrate the many elements to be taken into considerationCustomer research conducted by Marketing or others, combined with direct market activity, provides insights on customer needs and expectationsHaving a clear understanding of the Desired Customer Experience helps the ZRL and Customer Relationship Team in the execution of their day to day activities. These behaviors can positively differentiate Zurich in the marketplace.

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Customer Management Strategy requires common customer, and customer segment understanding frameworks. These will drive collaboration and sharing.

Customer Understanding

Company Overview

Key Strategies/ Initiatives

Industry & Competitive Environment

Competitor / Broker

Relationships

ZurichPrioritized

Opportunities

Zurich Relationships,

RevenuesProduct Density

Risk

Organization &

Leadership

Key Business

Issues

Customer Understanding Framework Customer Segment Understanding Framework

Customer Segment

Understanding

Competition & Distribution

Structure

Competitor Market Shares,

Products & Relationships

Customer Segment

Understanding

Key Segment Characteristics,

Buying Behaviors,Dist. Practices

Customer Segment,

Regulatory Issues,Opportunities,Value Props

Customer(Micro) Segment / Sector

OverviewZurich

Penetration,Distributor

Strategies, CriticalOpportunities

Segment Size, Composition defined for

an area

Zurich Market Share,

Dist. Relationships,Strategies, Revenues,

Product Density,Risk

Shared with and available to the entire customer relationship and

service team.

Shared with and available to the entire team connected to the distribution channel reaching the customer segment or industry sector.

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Industry-leading thought leader

Open, transparent, & trustworthy

Hassle-free settlement

Corporate customers almost expect an insurance company to work against them, so they are seeking an open, transparent, and trustworthy insurance provider that provides fair claims settlements

Dedicated service

Helpful claims management services are required to help corporate customers stay on top of the large volume of claims that transpire and have a hassle-free settlement experience

Corporate customers want to form a relationship with a dedicated account team that will understand their needs and provide a high-level of service

Customer research will help deepen the ZRL’s customer understanding.

Tailored risk services

Corporate customers face a multitude of highly specific risks and regulatory and business challenges and are looking for a insurance provider who can truly understand these complexities and tailor their risk services to them

As these complexities require an insurance provider that instills confidence, corporate customers need a provider who is respected as a global thought leader with an industry-leading product offering

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Common dimensions of the desired customer experience necessary for alignment of proposition and service delivery across Zurich …

Serv

ice

full service

Dis

trib

uti

on

valu

e

high

high

no advicelow

low Proposition complexity

Full advice

Limited advice

A Customer sub-segments

AA

BB

CC

DD

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Institutionalizing successful customer relationship management requires customer understanding, supported by well defined processes.

Customer strategy aligns and defines the inter-relationships of Business Divisions, Zurich Relationship Leaders, Executive Sponsors, Industry Leaders, etc

Functional representatives from underwriting, claims, risk engineering, marketing and others provide knowledge for our customers as part of our customer strategy

Training focuses on understanding of Business needs and responsibilities as necessary for teams and leaders

Clearly defined roles, responsibilities, escalation processes, etc.

Customer

Strategy

Functional Representatives-

Corporate, Commercial, Personal

Data corrected, tracked and maintained, with corresponding processes to ensure quality data for metric analysis

Metrics like customer retention, new business, customer penetration, profitability, customer satisfaction & loyalty

Customer Understanding and Delivery Framework

Training Metrics

Defined Roles Data Management

Customer research leads Zurich to better focus on understanding our customer and developing profitability and retention strategies.

Customer Research

Common Customer Understanding LanguageCommon language across Zurich about customers and intermediaries

Team Charter – introduction and scope

Introduction The purpose of the Team Charter is to define roles and rules of engagement for members of customer relationship management teams that are led by a Zurich Relationship Leader (ZRL). The CEOs of Zurich's businesses rely upon the Customer Management Leadership Team - whose members represent businesses and functions - to be the principal discussion partners to drive the Team Charter's implementation in their businesses.

ScopeThe Team Charter applies to selected corporate customers from any area within Zurich. While there will be exceptions, generally these customers will be:

– Relationship customers

– Multinational

– Have a large existing and/or potential revenue with Zurich

– Part of a Zurich strategic focus

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Institutionalizing the support for the ZRL role was helped by this Statement from Business CEO’s

Customer Relationship Management Teams to Better Serve Strategic Corporate Customers

Dear Colleagues,Integral to Zurich's strategy is our ability to work effectively across businesses, functions and geographies to develop a customer relationship.

Our Customer Relationship Management strategy enables Zurich to use product and industry specialists from around the company to gain a more complete understanding of the customer and their industry and optimize our approach to target customer segments. We are committed to embedding the best practices we want employees to adopt as part of how we manage and grow customer and intermediary relationships.

Customer Relationship Teams will be led by a Zurich Relationship Leader (ZRL), who will facilitate and ensure successful execution of our customer strategy with their matrix team-members for all relevant Zurich business and units. When applicable, there will also be an Executive Sponsor, representing Zurich at a senior management level. The Executive Sponsor strengthens our relationship with a customer's senior representatives by developing an awareness of their issues, and by setting mutual expectations of the relationship over time.

Within this Team Charter we have outlined a consistent way of working for these teams. There are four tools that we expect each team to use: a Customer Strategy, Customer Stewardship Meetings, a Team Chart and a Customer Scorecard. This will help teams shape our customer strategies and fully support the Zurich Relationship Leader (ZRL) in the strategy execution. We look forward to your active engagement and support.

Many thanks, CEO signatures 14

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Zurich Relationship Leader & Customer Relationship Team: Illustration of Zurich’s Relationship Customer Model

Zurich Relationship

Leader

BU 1 BU2 BU3 BU4 Claims /

Service

Risk Engineering

Others as needed:MarketingProduct Practices Prop. DevelopmentIndustry ExpertiseBroker Management

Business Division / BU / Underwriting Service / Product / Function Members

This is not a management reporting structure. It is illustrative of functional roles within the Customer Relationship Team and not reflective of official titles.

Executive Sponsor

BU5 BU6

Local RL Local RL Local RL

Broker(s) Customer

In line with Zurich’s Broker Relationship Management and Customer Centric Strategies

Industry Leader

Regional Executive / Country CEO

Team Charter – Roles of the ZRL & Customer Relationship Team

The roles that are outlined in the Team Charter include the Zurich Relationship Leader (ZRL), Local Relationship Leaders (RLs), Broker Relationship Leaders (BRLs), Executive Sponsors, Global Industry Leaders, Regional Executives, Country CEOs, functional roles (Underwriting, Risk Engineering, Claims, etc.), Business Analysts, and members from Life, Distribution, and the Industry Specialization Program. These are general role descriptions and not every team will include all members described. The ZRL and his/her team will manage the day-to-day activities and be responsible for adhering to the roles and deliverables as outlined in the Team Charter.

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Customer Relationship Teams: ZRL and team-member roles

The following is representative of some of the participants that will be in teams: The Zurich Relationship Leader (ZRL) is responsible for leading the customer relationship team and is accountable for identifying cross-discipline team membership and gathering input from team members in developing the customer strategy. He or she will provide leadership and ensure successful execution of the customer strategy, service delivery, satisfaction, business retention, new business pipeline management and growth of the business relationship. The Local Relationship Leaders (RLs) is responsible for the customer relationships they represent either on a functional, geographical or divisional role while continuing to be involved in developing the strategy with the ZRL. The Broker Relationship Leader (BRL) is responsible for relationship management, business development and profitable growth with their assigned broker/offices. For some customers an Executive Sponsor will support the ZRL in developing C-Suite relationships with the customer. The Regional Executive (RE) or Country CEO(s) are responsible for all business that is transacted within or from their territory and to represent a One Zurich image to the community in this geography. The lead Underwriter for each line of business is part of the team, and they are responsible for understanding customers' risks and exposures as well as Zurich's risk appetite and recommending appropriate proposals for their area of responsibility. A Risk Engineering team member is responsible for understanding what is being provided for the customer. . The Global Customer Claims Executive ensures and manages cooperation and knowledge sharing across claims for the customer. A team member from Global Life is assigned as necessary to customer teams.

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Team Charter – Program Management Office

Through interaction with Zurich businesses, the PMO maintains a master list of customers which have an approved ZRL assignment and are within the scope of the Team Charter. The PMO coordinates amongst the businesses to obtain the information on the four customer relationship management tools (Customer Strategy document, Customer Stewardship Report, Team Chart, Customer Scorecard). The PMO creates Group-wide management reports and program proof points for all customers that are part of the Team Charter program. In addition, the PMO observes and identifies trends, analyzes the correlation between Zurich's results with this customer segment and implementation of the Team Charter, and highlights success stories.

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Team Charter – Customer Selection

Corporate customers reflect customers of a certain size and buying behavior to justify the assignment of a ZRL and customer relationship team to support their activities with Zurich.

Does the customer have a strong relationship with Zurich?Does the customer fit into our desired underwriting appetite for core / key lines of business?Does the customer represent a significant growth opportunity with Zurich? Do we have an existing high product density for this customer across Zurich? Is the scale and complexity of the company best served by a ZRL team to deliver relationship and/or high quality service?Is the customer a significant player in one of our global industry practice sectors and meets many of the criteria mentioned above?

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Team Charter – ZRL Assignment

Zurich created the Zurich Relationship Leader role with a mandate to represent all of Zurich's capabilities for selected customers and their intermediaries. The primary selection for the ZRL will be from the Customer Relationship Management community. This team has been selected for necessary training and experience that will help Zurich focus and augment relationship interactions with selected corporate customers. They will share common characteristics, including:

– Currently in a relationship position with the customer, or someone deemed capable to achieve this in a short period of time

– Located in a location where he/she can easily have contact with the customer and/or their principal broker(s).

– Have a strong understanding of the overarching needs of the customer and the capabilities and appetite of Zurich.

The following individuals are responsible, from any of Zurich's businesses, for the approval of ZRL assignments as well as all inquiries:

– xxx – C&DM America’s

– xxx – C&DM Europe

– xxx – C&DM Asia Pacific

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Team Charter – Tracking and Reporting

There are the following four tools that will aid the ZRL and team in ensuring that they help deliver one Zurich and our brand promise:

– Customer Strategy Document

– Customer Stewardship Report

– Team Chart

– Customer Scorecard It is the responsibility of the businesses to track the delivery and quality of these four deliverables. The PMO will coordinate amongst the businesses to support and track the implementation of obtain the appropriate information in order to create Group wide reports and KPIs as it relates to the successful implementation of the Team Charter.

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Customer Relationship Team – tools

The ZRL is responsible for ensuring that the ongoing customer management and planning is conducted in accordance with the consistent Customer Relationship Management process developed for our large customers. The ZRL is responsible for managing the overall customer contact strategy, and for defining the process for managing and sharing the results of customer interactions with the team and, when necessary, with management. There are four tools that will aid the ZRL and Team in ensuring that they help deliver One Zurich and our brand promise:

Customer StrategyCustomer Stewardship ReportTeam ChartCustomer Scorecard

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Suggested Framework For Tracking Implementation of Customer Relationship Team Tools on Target Customers

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Metric Tracked ZRL Customers Top 100 Customers Executive Sponsor

Program Customers

Strategy Status(Final/Draft/)

Strategy Last Modified (Year)

Scorecard Complete(Yes/No)

Scorecard Quality(Good/Partial/No Data)

Team Chart(Yes/No)

Last Stewardship Meeting(Year)

The following metrics or milestones are leading indicators of success

New businessProduct densityRetentionCustomer & Intermediary SatisfactionImplementation and use by ZRL’s of the four toolsCustomer TestimonialsIntermediary referrals / lead generationCustomer participation at Zurich-sponsored events

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Concluding remarks:

Despite various challenges, over the past ten years Zurich has embraced the ZRL and Customer Relationship Team roles

Customer and intermediary feedback indicate this is an insurance industry differentiator for Zurich

The achieved results have reinforced support for the ZRL model

The Team Charter has been a great vehicle for Zurich to help institutionalize the ZRL role

Copyright @ 2011, Zurich American Insurance Company

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About Zurich

Zurich in North America is a part of Zurich Financial Services Group (Zurich), an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Founded in 1872, the Group is headquartered in Zurich, Switzerland and employs approximately 60,000 people serving customers in more than 170 countries, including more than 9,500 employees in North America.

Zurich entered the U.S. market in 1912. According to Highline Data LLC (NAIC 2008), Zurich in North America (www.zurichna.com) is the second-largest writer of commercial general liability insurance and the fourth-largest commercial property-casualty insurance company, serving the global corporate, large corporate, middle market, specialties and programs sectors. Zurich's risk engineering services in the United States are provided by Zurich Services Corporation.

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