Manulife pursues holistic, customer-centred strategyBy Donna Glasgow | August 18 2014 09:00AM
Marianne Harrison, Manulife Financial’s senior executive vice president and general manager, Canadian division, intends to put the customer “at the centre of everything we do” – a strategy that is bringing significant change to the organization on many levels. One major change implemented last year saw the Canadian division restructured around its customers – retail and institutional instead of by product lines. In an interview with The Insurance and Investment Journal in late May, Harrison – who has been leading the Canadian division since January 2013 – says the structure is more holistic for the client. The retail side now includes insurance products and wealth management.
“We used to have all of our operations within each one of our business lines where the different products had their own operations department. We’ve pulled all of our operations out into a shared service.” This enables the client to feel like they are doing business with the company and not a product line. Looking at it from the client’s viewpoint she says, “I don’t want to think of myself as a customer of universal life…or a customer of a mutual fund. I want to think of myself as a customer of Manulife,” she says, adding, “I think our organization’s structure has been a real positive step in the right direction to show that we are putting the customer in the centre of all that we’re trying to accomplish.”
Harrison adds that the reorganization has seen some little bumps in the road but has come a long way in the past year in putting the customer at the core of the company’s business. “I want our employees to put themselves in the shoes of the customers. I want them to think more like that.”
The ability to service customers in a holistic way is important to the customer-centric strategy. The previous structure by product line meant that customer information was stored in multiple places. The company is currently reorganizing its systems so that it can create integrated customer records containing all the products held with Manulife.
“We’re heavily into the technology piece of it as well in terms of making sure we have one customer record that is fulsome and has all the information from a customer perspective.”
Also, Manulife’s Canadian division is in the process of reducing the number of call centres from 22 to one – a multi-year project. Previous to this project, call centres were organized by product line or service.
Broad product shelf
Another main component of Harrison’s customer-centric strategy is to ensure that Manulife offers Canadians a broad product shelf on both the insurance and wealth side. This will enable it to meet the financial needs of consumers throughout the various stages of their lives. This holistic approach includes an increasing interest in serving the needs of the younger generation – the Millennials.
Manulife is currently doing a great deal of research aimed at deeply understanding the needs of this demographic and the products that Millennials are looking for. “From a Manulife perspective, where our sweet spot has always been is that retiree or pre-retiree in terms of the age group. This is a different demographic in terms of product…”
Younger people are generally thinking of buying a house, starting a family, and are typically not looking for complicated insurance products, such as complex universal life, she adds.
Harrison says the company is evaluating its product shelf “and saying there are opportunities that we can do things differently.” She gave the example of Manulife’s Synergy, the combination product launched in 2011 that includes term, disability and critical illness insurance coverage. “It’s interesting because we put that into our advisor channel and it did not resonate very well. I think one of the reasons it did not resonate very well is because it was the wrong demographic (advisors often serve an older, more affluent clientele). It really should have been geared more to this younger generation who are looking for some coverage but not complete coverage and something they can shift between (as they go through) different events that they may have, whether it is a life event or disability.”
Whether a product gains traction or not involves not just the qualities of the product itself, but how it’s distributed, she adds. “So we’re starting to re-shift that product, moving it probably more away from the advisor channel because I think it will resonate better outside of it.”
At the time of the interview, Manulife had not finalized what it plans to do, but she said Synergy will probably move under the company’s CoverMe brand that is marketed directly to consumers.
The strategy to expand the company’s business with the younger generation does not leave Manulife’s network of independent advisors out of the loop. Harrison explains that the company’s direct business is still very small and is intended to offer simplified products to people who are not looking for advice. “That’s really where that direct side is. It’s not about trying to compete on the advice side.”
She also sees a connection between the two distribution approaches. As younger clients’ insurance and investment needs grow more complex, Harrison’s strategy includes transitioning them to advisors. “The best part, from my perspective, is to bring them in, get them into the organization, get them to understand Manulife and transition them over time to our independent third party advisors…What we’re trying to accomplish is making sure we can meet the needs of consumers at all aspects of their lives. They go through different financial challenges throughout their life and we want to be able to be with them throughout those various times.”
As part of the company’s strategic thinking, Manulife has segmented these needs into three key areas, she explained.
Build and Protect is the younger generation, those clients who are starting a family, buying a home, having children. “That’s where I think our bank comes in nicely, that’s where some of these simplistic products like the Synergy product will come in too.”
Retire with Confidence – these clients are starting to get older and want more advice. “That is where the advisor channel can really help them. We can help create that link for them and easily transition them over to an advisor.”
Leave a Legacy – the final one involves estate planning and inheritance and passing it on to the next generation – also a complex area requiring advice.
One challenge facing the industry as a whole is the rapid pace of technology change and keeping up with consumers’ expectations in that regard, says Harrison.
Technology is important to Manulife’s strategy to put the customer at the centre of everything it does, underlines Harrison. “More and more, people don’t have time. Canadians don’t want to sit there and wait 30 days to get their term insurance approved or disapproved.” This means that products such as fast-issue term insurance are important, as is access to information whenever they want it. “They don’t want to be dealing with a call centre that works form 8 a.m. to 8 p.m.”
Customers also want online technology that allows them to check on information, such as the status of a claim, she adds.
Momentum in fund sales
Manulife is seeing momentum in mutual fund sales growth due to its focus on offering broad-based solutions to consumers, says Harrison. “That’s why you’re seeing wealth play a more important role in our business as we move forward…When people are looking at their financial picture from a financial planning perspective, it’s more than just insurance, it’s the wealth side of it as well. It is an important growth opportunity for us…”
She says the company is still a very small player in the mutual funds market with the banks still dominating this sector. “So we have a lot of opportunity and runway in front of us and we have been seeing that growth.” Part of this growth is due to just building a track record with strong fund performances that have earned an increasing number of four and five-star ratings from Morningstar.
She adds that being a global company, Manulife has a key advantage in the fund business. “We have people on the ground in Asia and the United States who are investing on our behalf and in Canada as well, so I think that having that global presence is quite significant. It’s not like we’re trying to do all that here from Canada; we have people in those markets who know those markets, which is a real plus for us.”
More than insurance
Is the growth in the wealth business redefining Manulife? Harrison believes so. “I do. I really do…We really want to change our branding.” The company has much more to offer than just insurance, she emphasizes. “That’s where I come back to financial planning and protecting people, growing their assets – That’s what we want to be known for.”
Manulife, she adds, is now both an insurance and investment company with earnings coming almost equally from both. “Keeping that around 50-50 is probably the best positioning for us, so I would say the biggest thing for us is letting people know we’re not just an insurance company…”
This effort is also the key to holistically serving the company’s network of independent advisors, she adds. These advisors are often looking at their clients’ entire financial plans – “not just their insurance, but insurance and wealth and so (we want to) make sure that we are marketable to those advisors…”
Harrison says the company’s goal is to continue to expand in the independent channel that includes, managing general agencies, broker-dealers, Manulife Securities advisors and national accounts.
She adds that Manulife is looking at helping advisors who are “mono-line focused” expand their businesses to service both the insurance and wealth needs of their clients. She gave the example of advisors who may be very good at selling insurance but do not focus on the wealth side at all. “We want to try to help them in terms of the wealth side…They don’t want to lose their customers to another advisor who may be able to service them on both sides, so we’re looking for ways to be able to help them expand their business so they can service customers more holistically.”
How will they do this? The strategy is still being developed on how to approach this, but Harrison says it will involve providing training and sales expertise.
It’s not only on the retail side of the business that Manulife is pursuing a customer-centred strategy, underlined Harrison. On the group side, last spring Manulife announced the creation of a national team of mental health specialist to support its group insurance clients and employees. This initiative – aimed at getting employees back to health and work more quickly – is also part of the company’s efforts to put the company at the centre, points out Harrison.