Perhaps most importantly, only 43.4 percent of respondents indicated that they use any CRM tools. Thus, Aberdeen surmises that there is substantial room for CRM vendors to expand into this vertical market.

Mary Cauwels, senior CRM product marketing manager with SAP, agrees. She told CRMDaily.com that insurance companies stand to benefit greatly by improving the quality of their in-bound contacts with customers.

Benchmarking Debate

Only about half of the respondents to the Aberdeen survey said that their company performed a benchmarking study before purchasing CRM software. "That makes ROI pretty hard to calculate," noted report author and Aberdeen vice president Denis Pombriant.

However, insurance companies that already have implemented CRM software probably made their software selection and purchase several years ago, he noted, and the trend toward building iron-clad ROI cases for CRM initiatives is a recent one.

Early adopters, notes the report, are less concerned with gaining ROI from an enterprise application than with gaining a competitive advantage. This is especially true in the dog-eat-dog insurance industry. This issue of competitive advantage may overtake ROI in the current debate over justification of investments in CRM projects.

Expertise Lacking

For the insurance industry, the primary issues remain vertical functionality and domain expertise, said Pombriant. Many insurance companies continue to build customer-facing and customer-service applications in-house. The fact that they tend to have large IT groups at their disposal may contribute to this trend. Financial service firms, in general, tend to cling tightly to their home-grown applications, Cauwels said, even in areas like contact centers.

But when asked what criteria they used to determine whether they would purchase a CRM application from a vendor or build one in-house, only 24.5 percent of respondents to the Aberdeen survey said price was a determining factor. In contrast, 37 percent indicated that the applications available did not fit their needs. Another 20 percent said that vendors did not display a high level of domain expertise in insurance.

Second Wave Coming

The core CRM applications of sales, marketing and customer service are the most popular among insurance companies, found Aberdeen. Field service, help desk, and Web-based quoting lagged far behind.

For this reason, Aberdeen predicts that CRM will see a second wave of adoption among insurance companies. Which modules they will adopt, however, remains to be seen.

Many companies in this vertical consider one core customer-facing process -- the claims-management process -- to be proprietary. "That's their special sauce," Pombriant remarked, noting that many insurance companies believe that efficient claims processing provides a competitive advantage. So, this particular function may continue to get in-house IT attention for some time to come.