building sound customer relationships


Royal & SunAlliance is one of the world’s major insurers, with operations in around 50 countries it carries out business in over 130 countries. The company looks to meet the needs of the brokers with which it deals and who are its direct customers. This case study shows how the company has successfully developed relationship management with its brokers using an approach called ‘Energy’.

Like many other industries, the insurance industry operates in a dynamic global environment. Individual insurance businesses face high levels of competition from rivals which use latest technologies to update the way they operate continually. Insurance companies also face the uncertainty of an inter-dependent world in which change can be dramatic and unexpected, as evidenced by the terrible events of September 11th 2001. The terrorist attacks have had massive knock-on effects not only in terms of human suffering but also in the form of a multi-billion pound insurance clearing up operation.

Like other service industries, insurance companies are faced by consumers whose requirements are becoming increasingly sophisticated and whose willingness to switch to another supplier is on the increase. To compete successfully and thrive in this environment, companies must be forward thinking in their approach to customers and in applying new techniques.

This case study shows how Royal & SunAlliance has applied successful customer segmentation and relationship management to achieve successful partnerships with its key customers.


Customer segmentation is the process of gathering information about customers, identifying distinct segments of the overall market and then developing approaches to meet the needs of these segments.

Relationship management is the process of developing one-to-one relationships with customers.  In a market in which products are increasingly similar, the key to differentiating one brand from another is through customer relations.


Royal & SunAlliance sells most of its commercial business through insurance brokers, who place the business with the company on behalf of their industrial and commercial customers.  The most successful brokers have a strong service ethic and work hard at their technical and claims service.  This approach wins clients and also helps to retain them.

Royal & SunAlliance believes that in the long term the number of brokers will reduce. The winners of the future will be brokers who currently run successful businesses and who demonstrate vision, adaptability and innovation.  Qualitative research carried out has shown that these brokers need support from insurers who are prepared to put the same amount of energy into the relationship to enable them to achieve their goals.  Using this information, Royal & SunAlliance introduced a proposition for key independent brokers that brought them service and resources to support them in winning, retaining and servicing clients. This proposition was called ‘Energy’.

In order to deliver a solution that would meet customer needs, Royal & SunAlliance consulted a sample of its top 200 independent brokers. The results of this research revealed the key elements that brokers were looking for in a partner:

  • relationships at all levels with individuals who are empowered to make decisions
  • a proposition exclusive to themselves
  • financial support to aid their strategic goals.

The proposition required that Royal & SunAlliance should change its focus.  Instead of conducting business on a highly product based, transactional and price focussed level, the Energy proposition required Royal & SunAlliance to change its approach and instead sell solutions giving added value, focusing on promoting long term relationships.The aim was to follow through a specific process to help brokers to achieve their aims by:

  • analysing and understanding key customers’ business plans
  • analysing and understanding the organisation’s total relationship with these customers
  • joint planning with key customers
  • giving a total relationship, incorporating all sectors of Royal & SunAlliance including Commercial, Life and Personal lines.

Having established these aims, it was then possible to start to build strategic partnerships with key customers and a long-term mutual outlook that enables both parties to achieve their goals.

Choosing the brokers

A vital part of building on the Royal & SunAlliance brand was to choose the brokers best suited for joint development of the Energy proposition.  Because selling insurance is so competitive, it was essential to focus on working with high quality brokers who had a positive attitude to business and innovation as well as clear long term goals. Royal & SunAlliance chose to work with independent brokers who could demonstrate:a loyal customer base

  • a strong service ethic
  • a desire for a long term strategic partnership
  • promising future prospects.

Strategic partnerships are long term, exclusive partnerships between Royal & SunAlliance and key brokers using the Energy proposition. They are designed to secure the future success of all partners and are based on:

  • a shared vision of the future
  • common goals
  • clear understanding and commitment from everyone involved
  • mutual benefits
  • innovation and integrated solutions.

The partnership is not about offering special discount on price but about allowing brokers to gain advantages by using other benefits and resources to win and secure long term customers.

Why Energy?

The name Energy was chosen because it symbolises the values and behaviours of Royal & SunAlliance people and broker partners. Having selected 150 broker partners, the objective was to help them to grow their businesses and by doing so to increase Royal & SunAlliance’s share of that business. The emphasis was on customer service levels as well as providing additional first class value-added benefits.  Energy works because those operating it:

  • understand each customer’s unique needs
  • plan and achieve mutual goals
  • provide the tools, resources and service to achieve goals.

This often resulted in a classic ‘process bottleneck’, which slowed down the delivery and created difficulties in maintaining the required service level.  Energy required a fundamental change in the nature of the relationship between brokers and Royal & SunAlliance.  A ‘relationship manager’ controls the overall business plan and acts as a co-ordinator between different business divisions and the customer. However, on a day-to-day business the relationship is disseminated to empowered individuals who produce relationships at all levels, hence eliminating bottlenecks.

Energy provides a number of important benefits to key customers.  Services include:

  • training either on-line or in-house
  • marketing support
  • knowledge sharing eg IT and finance
  • use of Royal & SunAlliance facilities
  • advice lines eg legal, financial, Health and Safety and stress counselling
  • financial assistance.

It is password protected and each broker has an individual user ID in order to gain access.  The web-site, includes on-line training materials, risk management guidance, a technical library, details of consultancy available, terms of business agreements and links to other useful Royal & SunAlliance sites.  There is also a facility for sharing of information between Energy brokers.  The site is regularly updated and will soon provide the facility to access claim details on-line.

All new business initiatives need to be monitored in order to assess performance levels and to make ongoing improvements.  The key indicators used by Royal & SunAlliance to monitor success are:

  • delivery of service standards
  • higher business retention levels
  • profitable growth on existing business
  • increased flow of new business
  • market leadership
  • customer feedback.

Ensuring success

Energy brokers were carefully selected, taking into consideration both quantitative (eg profitability) and qualitative (eg professionalism) factors and ensuring they are ‘winners of the future’.  Training of key development staff was important - participants developed skills in relationship management and business planning. Clear communication channels were created to all staff and brokers at all levels.

An Energy Business Manager was appointed to ensure a consistent approach throughout the UK. Finally, constant monitoring of the performance of Energy brokers provides a form of quality control, making it possible to promote new brokers and, if necessary, to relegate brokers, where the relationship is not working.

Energy required Royal & SunAlliance to re-organise its business and implement a fundamental change in approach in terms of customer segmentation and customer relationship management.  It has helped the business to focus on the relationship between insurer, broker and client with a view to providing solutions to the increasingly varied business needs of customers.  The proposition is as individual as the relationship with each broker.  In the present market, service delivery forms a vital element and is a key differentiator between suppliers. By helping brokers to grow their business, Royal & SunAlliance is sharing in their long term success.

Energy has already delivered clear positive results for both brokers and Royal & SunAlliance.  A regular programme of Energy broker feedback allows Royal & SunAlliance to constantly review and update improvements to the relationship.