A lot of tools are available in customer service centers that allow insurers to reach out to their customers and be accessible to policyholders needs, but in-surers and analysts alike know that customers and CRM strategies often can be like the proverbial square peg and the round hole. Nevertheless, to succeed insurers must find a correct match.
For GE Employers Reinsurance Corp., interactive voice response (IVR) proved to be an ill-fitting square peg. By abandoning its IVR strategy and having customer service representatives answer incoming calls, GE ERC virtually eliminated its call abandonment rate and has sped up the process to deliver better service to its customers. That doesnt mean an IVR is wrong for all companies or that carriers will be abandoning other technology-based CRM functions. Many carriers are leveraging automated solutions to improve service. Insurers are faced with a dual strategy, says Cindy Saccocio, senior analyst for TowerGroup. They need to retain their existing customer base with high-touch type of services [while] they have another generation of new customers they are looking to attract that is going to demand high-tech-oriented services.
Datas the Key
As with most insurance issues, the problem and the solution often revolve around the data. The answer to nearly every business problem is getting the data where it can best be used. The bane of many IT departments is finding a way for those who need the data to get access to it. That is particularly true with CRM because policyholders dont call their insurers or click on a Web site to get a weather report. Customers want specific information about their policies or their bills.
What a lot of insurance companies have to deal with is an older, archaic infrastructure, says Chris Selland, managing director of the Reservoir Partners consulting group. Generally speaking, this is where your customer data sits. It is something insurance companies have to contend with, but it also can be an opportunity because one of the advantages [insurers have] is the customer data tends to be centralized. It may not be centralized in a CRM application, but at least it all sits in one place.
SBLI USA Mutual Life Insurance Company, Inc., understood that problem and underwent, with CRM software developer E.piphany, a CRM project that had three goals, according to Eric Bulis, vice president and information officer for SBLI USA. We wanted to increase productivity of our call center agents and our customer service group, he says. We wanted to give the folks who support our customers a holistic view of our interactions with our customers across all the touch points we could bring together. Finally, we wanted to put a new front end onto a legacy system, the interface for which truly was not meeting our needs, especially in the call center where speed is of the essence.
In todays world, legacy systems and new applications usually mean one thing: Web services. CRM technology has matured enough [to] where it was worthwhile to make the investment, says Bulis. We moved to Web services as part of the architecture of this implementation. It gave us the business case to develop custom middleware we could reuse.
The CRM project has offered many tangible benefits to the carrier, including a reduction in the calls that went to the overflow center operated on an outsourcing agreement, says Kerry Tucker, executive vice president of administration for SBLI USA. The companys call center falls under her direction. The fewer calls we overflow to them, the greater our ability to keep the calls in-house with the primary specialistthe SBLI employeeand reduce expenses, she says.
The SBLI USA call center now is handling five percent more calls per hour than it did previously, Tucker notes, the average time for a call has been reduced by six percent, and overflow expenses have been reduced by approximately 10 percent. The SBLI USA call center handles approximately 200,000 calls annually, she adds.
Live and in Person
GE ERCs decision to abandon the interactive voice response system, according to Steve Rudderham, call center leader at the insurer, not only proved to be a good way to speed up the call center process, but also eliminated call abandonment by customers. The [IVR] message had four options and a get-out clause at the end. The whole message was about 15 to 16 seconds long, he says. Our abandonment rate was running at about 25 percent. Our first thought was the length of the message wasnt particularly an issue, but we started to analyze where the abandonment rates werethey were right at the beginning of the message. That indicated to us we needed to go out and start talking to our customers.
The data GE ERC collected from its customers led the company to return to live voices answering calls. Abandonment rate is down to three percentnot bad considering the industry average for people calling the wrong number is one to two percent. Since making the change in April, customers have been pleased and GE ERC is heading into a second phase of the project: to resolve the issue with the customer on the first call. Rudderham believes IVR works for some companies, it just didnt work at GE ERC. Customer retention is linked to customer experience, he says. Our customers very much prefer to speak to a person straight away.
Automate to Differentiate
Electric Insurance Company, based in Beverly, Mass., is a direct writer of property/casualty insurance products, so without the face-to-face communication that agent-focused carriers have, Electric felt it needed to deliver exceptional service through electronic strategies to differentiate itself from the competition.
One problem the carrier encountered was the loss of customers for nonpayment of premium. When that happens, it changes the nature of the risk in our eyes, says Jack Schumaker, vice president of call center operations. If your policy cancels for nonpayment of premium, its unlikely were going to reinstate the policy. Other carriers look at that cancellation unfavorably, as well.
Electric decided to tackle the issue and manually tested its plan by using two representatives to examine the list of customers who were lapsing into the cancellation process and make a phone call to see whether the company could help the customer work through the problem. If nothing else, it just drew the customers attention to the fact that [cancellation] was the next step in the process, says Schumaker.
Amazingly, Electric found if it was able to communicate proactively with customers on this list, it was able to save between 40 percent and 45 percent of those customers from cancellation. This compared to a 10 percent to 15 percent rate when the company did nothing. Schumaker says the company defined save as receiving a payment between four and 10 days of the contact.
Electric was not in position to handle such a practice with its own staff long term. To do the same process manually, we would have had to deploy six full-time employees to hit all the contacts. We were looking at a cost of $270,000 to make that happen, says Schumaker.
Instead, Electric turned to CRM supplier Envoy WorldWide, which contacts every person on the list instead of a select few, using both voice messaging and e-mail messages to reach Electric policyholders. Confirmation of the message being sent is fed automatically into Electrics policy-servicing system, and the customer service reps know when the message was sent. Although Electric would not reveal the cost of the implementation, the Envoy system proved to be much less expensive than what Electric would have had to spend to do the project on its own, Schumaker says, and the save rate was comparable to the manual test process.
Retention of customers is a key focus, says Schumaker. The company also has begun a program where it reaches out to customers whose policies are about to expire. If we are able to contact our customers prior to renewal effective dates, we see a three or four percent improvement in retention among those customers, he says.
The Envoy system also allows Electric to perform other customer-facing tasks. When Hurricane Isabel threatened the Atlantic coast earlier this year, Electric was able to prepare a list of customers in North Carolina and Virginia who were in the path of the storm. A message was sent offering a contact number for claims in case the storm hit and also providing advice on preparing for the storm. We got great feedback from that, says Schumaker.
Call Me
Selland believes insurers need to be aware of the current do not contact legislation that is playing havoc with the telemarketing industry. Carriers dont have a problem contacting current customers, he points out, but prospecting efforts, particularly for agents, will be curtailed. To stay ahead of the problem, Selland believes insurers need to keep their data in shape. Some carriers have their data in pretty good condition, he says. At least its all centralized, although it might not be in a modern database or CRM application. [Insurers] have a good handle on who their existing customers are and whom they can contact.
As the ability to search for new customers from lists is being curtailed (I wouldnt want to be a list broker right now, says Selland), carriers are finding it necessary to look for growth among existing customers. Finding other ways to touch the client, whether via e-mail, text messaging, or other forms of contact, will allow carriers to do the cross-selling or up-selling that will increase profitability.
You can have more touches with your policyholders and your clients, which, if you do a good job with itnot being heavy-handed about itwill pay off with better customer relations in the long term, says Selland.
Two Groups Better Than One
For MassMutual Financial Group, the retirement services area has exploded over the last decades as workers rely on investment programs to fund their retirement. During the last six years, the number of participants has more than doubled for MassMutual, and the carrier turned to Siebel Systems for a solution that would improve customer service and retention. The companywide system was rolled out in the call centerthe point of initial contact. The Siebel software suite aims to provide efficient and personalized experiences for plan participants at any point of contact with the company.
With employees changing jobs and investment plans, MassMutual also took a close look at its retention efforts and the way the company managed relationships with its customers. We created the participant relationship management group that looks at the participants from the point of enrollment all the way through retirement, says Shefali Desai, second vice president in MassMutuals retirement services area.
As a result, the company split its call center into two groups. The service side handles the day-to-day calls on issues such as enrollment, allocations, and general information. The retirement specialist group is manned by registered National Association of Securities Dealers (NASD) phone reps. They help the participants as the participants look to figure out the right solution at the point of job change or at the point of retirement, says Desai.
Now, the right information is available, and the right call center reps are available to answer any calls. We havent grown our call center staff, but weve created a lot of efficiency in the process, says Desai. By having a retirement specialist group, weve created a development plan for our participants.
The Right People
Having the right people with access to the right data in the call center makes the job of the CSR easier. Lynn Carroll, director of finance for Health Alliance Medical Plans (HAMP), an Illinois-based health insurer, points out in the past, HAMP had people in the accounts receivable department dedicated to answering customer calls. Where were trying to go is push a lot of [calls] to the customer service function and allow accounts receivable to focus on billing and invoice issues, says Carroll. There are a lot of hand-offs that occur if you cant present the information where everyone can see it and it can be routed.
Finding the right people to staff those call centers is another increasingly difficult task. LOMA, in addition to offering services to financial services companies, has developed suites of employee assessment products to help carriers select the right people. There always is a lot of pressure to find effective call center reps who can perform their job well and will be retained by their organization, says Barbara Kruse, second vice president LOMA Employee Assessment Products & Services. One of the key components in performance and tenure is whether theres a good fit between the person and the job.
Are You Ready?
An increasingly popular form of customer service for insurers has customers performing their own tasks electronically. Self-service works for the simple stuff, says Selland. More and more youre going to see this not just on the Web, but in voice and telephone service, as well. Its smarter for companies to be looking at rolling out forms of self-service because customers are willing to do it these days.
For example, in the claims process, many customers appreciate the opportunity to begin it online, TowerGroups Saccocio says, and then to follow it through over the Internet. However, not all carriers are ready for that yet. Some allow bits and pieces, but its still not fully evolved, she says. Older customers want to know the person they speak with on the phone at the call center understands who they are. The reps need to at least recognize if a customer has a broader relationship with the insurer, she says.
Such full views are not always available to the customer service reps. The biggest problem inhibiting insurers is their inability to become customer focused and to be able to service their customers in a more holistic way, says Saccocio. It also prevents them from taking on some of the demands of CRM because they are unable to capture the data out of the legacy systems where the data resides.
CRM Vendors
Afni Insurance Services
Bloomington, Ill.
309-828-5226
www.afniinc.com
AIG Technologies
Livingston, N.J.
800-788-0144
www.aigtechnologies.com
Alterian
Chicago, Ill.
312-704-1700
www.alterian.com
Amdocs
San Jose, Calif.
408-965-7000
www.amdocs.com
AMS Services, Inc.
Windsor, Conn.
800-444-4813
www.ams-services.com
Aspect Communications
San Jose, Calif.
408-325-2200
www.htmect.com
Avaya, Inc.
Basking Ridge, N.J.
866-462-8292
www.avaya.com
Avolent
San Francisco, Calif.
800-553-5505
www.avolent.com
Benefits Technology Group
Hopedale, Mass.
866-315-7100
www.bentechusa.com
Best Software Scottsdale, Ariz. 480-368-3700 www.saleslogix.com
CSC Financial Services
Austin, Texas
800-345-7672
www.csc-fs.com
Diagenix Corporation
Norwell, Mass.
781-871-6624
www.diagenix.com
DWL
Atlanta, Ga.
770-325-4000
www.dwl.com
eAgency Systems
Newport Beach, Calif.
949-253-9131
www.eagency.com
eAssist Global Solutions
San Diego, Calif.
858-458-4188
www.eassist.com
EchoMail, Inc.
Cambridge, Mass.
617-354-8585
www.echomail.com
EDS
Plano, Texas
972-604-6000
www.eds.com
Envoy WorldWide
Bedford, Mass.
781-482-2100
www.envoyworldwide.com
E.piphany
San Mateo, Calif.
650-578-7200
www.epiphany.com
Exstream Software
Lexington, Ky.
859-296-0600
www.exstream.com
E-Z Data
Pasadena, Calif.
626-585-3505
www.ez-data.com
Fineos
South Portland, Maine
207-879-0400
www.fineos.com
Firepond, Inc.
Minneapolis, Minn.
925-229-2300
www.firepond.com
Firstlogic
La Crosse, Wis.
608-782-5000
www.firstlogic.com
Fiserv Customer Contact Solutions
Brookfield, Wis.
262-879-5000
www.fiserv.com
FMR Systems, Inc.
Palatine, Ill.
847-934-5566
www.fmr-systems.com
FrontRange Solutions
Colorado Springs, Colo.
800-776-7889
www.frontrange.com
Fulcrum InteTech
Napa, Calif.
707-224-7700
www.fulcrumit.com
Genelco Software Solutions
St. Louis, Mo.
800-983-8114
www.genelco.com
InterlinkONE, Inc.
Wilmington, Mass.
978-694-9992
www.interlinkone.com
Konexx
San Diego, Calif.
800-275-6354
www.konexx.com
LOMA
Atlanta, Ga.
770-951-1770
www.loma.org
London Bridge Group
Norcross, Ga.
770-810-8000
www.london-bridge.com
MarketSoft
Lexington, Mass.
781-674-0000
www.marketsoft.com
Mobitor Corporation
San Ramon, Calif.
925-552-8230
www.mobitor.com
Motion Computing
Austin, Texas
512-637-1100
www.motioncomputing.com
NaviSys
Edison, N.J.
800-775-3592
www.navisys.com
Oaktree Systems
Calverton, N.Y.
631-369-0094
www.oaktreesys.com
onClick Corporation
Houston, Texas
866-722-5425
www.onclickcorp.com
OneShield, Inc.
Woburn, Mass.
888-663-2565
www.oneshield.com
Pegasystems
Cambridge, Mass.
617-374-9600
www.pegasystems.com
PeopleSoft
Pleasanton, Calif.
800-380-7638
www.peoplesoft.com
Pragmatech Software, inc.
Amherst, N.H.
800-401-9580
www.pragmatech.com
S1 Corporation
Atlanta, Ga.
404-923-7637
www.s1.com
SAS Institute, Inc.
Cary, N.C.
919-677-8000
www.sas.com
Search Software America
Old Greenwich, Conn.
203-698-2399
www.searchsoftware.com
Siebel Systems
San Mateo, Calif.
650-389-1128
www.siebel.com
Skywire Software
Frisco, Texas
972-377-1110
www.skywiresoftware.com
Sun Microsystems
Santa Clara, Calif.
650-786-0662
www.sun.com
Teradata
Dayton, Ohio
937-445-5000
www.teradata.com
TIA Technology A/S
Denmark
+45 7022 7620
www.tia.dk
Tri Plus Technologies
Norcross, Ga.
770-817-9090
www.triplus.com
Touchstone Corporation
Costa Mesa, Calif.
714-755-2810
www.wintouch.com
Witness Systems Roswell, Ga.770-754-1900
www.witness.com
XDimensional Technologies
Brea, Calif.
800-789-2567
www.xdti.com
Xerox Global Services
Rochester, N.Y.
716-264-6550
www.xerox.com
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.