Best Practices in Customer Service for Insurance Maturing the Focus from Transaction to Interaction Mark Breading SMA Partner Strategy Meets Action
Table of Contents Customer Service: Beyond the Transaction... 3 Value in each interaction... 3 Value in overall relationship... 4 Best Practice Examples and Scenarios... 5 New strategies for inbound comunications... 5 Creativity in customer service response... 7 Dynamic and flexible resource management... 8 Advanced reporting and analytics... 9 The Next Generation of Best Practices... 10 Achieving true multichannel integration... 10 Delivering a best practice customer experience... 10 Capitalizing on the future contact center... 11 SMA Call to Action... 12 Interactive Intelligence Perspective... 12 The Author... 15 Copyright 2013 Interactive Intelligence, Inc. All rights reserved. Brand and product names referred to in this document are the trademarks or registered trademarks of their respective companies. Interactive Intelligence, Inc. 7601 Interactive Way Indianapolis, IN 46278 Telephone/Fax (317) 872-3000 www.inin.com Rev. 02/13, version 1 2013 Interactive Intelligence, Inc. 2 Best Practices in Customer Service for Insurance
Customer Service: Beyond the Transaction It s a new day in the world of customer service! Expectations are being set by other industries with wow-level customer experiences, largely enabled by rapid advancements in technology. For insurers, delivering outstanding, remarkable service is vital to their success. Retention, a key profit driver, is strongly influenced by the customer experience. And most insurers must address service levels for two highly important parties their policyholders, and their distribution partners. Insurers have a long history of transaction processing expertise. They are extremely adept at handling customer service transactions. Now it s time to elevate customer service to the next level, and the leaders are doing just that advancing beyond the service transaction to focus on the customer interaction. In order to improve customer service, insurers must progress from a transaction focus to an interaction focus. That means thinking about transactions differently and considering new attributes. Most insurers have implemented technology solutions to automate their high-volume, commonplace interactions with customers. However, many times the full potential of the solution for improving the customer experience is not realized. Over time, increasing transaction volumes and advances in technology solutions have driven the cost per transaction for many of the everyday interactions to low levels. Now, as the customer experience takes center stage, many insurers are looking for new ways to deliver more value at every touch point. They are taking a larger view, evaluating each interaction, and considering every exchange in the context of the overall relationship. Value in each interaction In order to improve customer service, insurers must progress from a transaction focus to an interaction focus. That means thinking about transactions differently and considering new attributes. Figure 1 identifies the attributes of transactions in the traditional environment, and the new/changed attributes required in a more modern environment. SMA Figure 1: Evolving Attributes of Customer Service Transactions, Strategy Meets Action 2013 2013 Interactive Intelligence, Inc. 3 Best Practices in Customer Service for Insurance
In the past, the primary attributes for insurance customer transactions have been efficiency, accuracy, compliance, and a reasonable response time. These attributes continue to be important today and continuing improvements should be expected for all four. But the one element that is taking on a new level of importance is response time. Reasonable response time is no longer good enough. There are new demands, and in many situations, a much more rapid response time is required to stay competitive and meet customer needs. In years past, the parameters for acceptable response time were set by the insurer or regulators. Today, prospects, customers, and agents are defining what an acceptable response time is, and they are setting the bar much higher because all of them have the option of doing business with another insurer. In this age of customer experience, there are other new dimensions that are becoming increasingly important. Customers want to communicate in new ways. They expect to get expert advice when they need it. Insurers must be able to service customers using mobile devices as easily and seamlessly as if they were interacting in face-to-face mode, or via the phone. Today, people are used to self-service options that are always available and easy to use. When they interact with contact centers, they expect the best subject matter expert to be available. Customers expect a more meaningful, prompt, and satisfactory experience! Value in overall relationship While a single transaction may have a strong influence on the customer s perception of the relationship, more often the relationship is shaped by multiple transactions, as well as other factors (such as price). Consequently, an awareness that extends beyond the individual transaction is mandatory. An understanding of the full stream of interactions with a customer is an important capability that contributes to creating value in the eyes of the customer. This does not mean that insurers should deemphasize individual transactions or lose focus on the important attributes of a successful transaction. It does mean that understanding the context of the transaction is a critical element for delivering an outstanding customer interaction. While a single transaction may have a strong influence on the customer s perception of the relationship, more often the relationship is shaped by multiple transactions, as well as other factors (such as price). Consequently, an awareness that extends beyond the individual transaction is mandatory. To name one example, many customers cite a poor billing experience as a reason for an unsatisfactory relationship with their insurer. Some customers may even defect due to a single bad experience. Many will stay with their insurer, but are likely to view less value in the relationship, and are unlikely to purchase additional products. There is no question that every single transaction is important all transactions, even those that are seemingly isolated, can have a far-reaching impact. SMA 2013 Interactive Intelligence, Inc. 4 Best Practices in Customer Service for Insurance
To view this example another way, those insurers that are able to detect that a customer is unhappy with a billing transaction have a better opportunity to recover. Ideally, a proactive communication will take place to apologize and reassure the customer that the company is aware of the situation. Whether or not the proactive message is possible, or necessary, the situation should be recorded to provide context for future interactions. Consider the reaction of the customer when a marketing promotion arrives the week after an unpleasant experience. The impact could be significantly negative. When the next communication occurs, whether it is a coverage change, inquiry, claim, or other transaction, the company representative involved should be aware that the prior interaction with the customer was unsatisfactory and take extra care to satisfy them. Emerging best practices include proactive, automated communications to address the customer situation, or real-time, supervisor intervention during a customer interaction. Best Practice Examples and Scenarios The concepts behind excellence in customer experience can be illustrated by investigating best practice examples and scenarios. The state-of-the-art in insurance customer services is steadily advancing. Leading insurers are innovating in this area, and continue to introduce new approaches. Based on a series of interviews and implementation experiences with insurers, SMA has identified best practice examples in four areas: new strategies for inbound communications, creativity in customer service response, dynamic and flexible resource management, and advanced reporting and analytics for customer communications. New strategies for inbound comunications Insurers are actively addressing the management of inbound communications with new approaches and new tools. In the insurance industry, it is particularly important that every single customer touch point be appropriately handled. Both top and bottom line results can be significantly influenced by the effectiveness of the communication as well as the impact of the interaction both determined by the capabilities the company is able to deliver. Insurers are actively addressing the management of inbound communications with new approaches and new tools. In the insurance industry, it is particularly important that every single customer touch point is appropriately handled. Leveraging the best rep strategy Some insurers are putting top priority on making sure that inbound callers are quickly connected with a SMA live contact center representative 100% of the time. Their goal is to make sure that a customer is never required to leave a voicemail message. Automatic call distributor (ACD) systems that support advanced, skills-based routing are vital to accomplishing this. It requires routing based on specific criteria that may be retrieved from the administration systems rapidly routing an interaction to exactly the right person, such as the assigned adjuster, agent with special language skills, or representative that has handled previous conversations with the policyholder. 2013 Interactive Intelligence, Inc. 5 Best Practices in Customer Service for Insurance
One regional property and casualty insurer has taken the no voicemail policy a step further. Voicemail is not even available in this organization because they have consolidated all representatives into one common contact center. Cross training is provided so that all reps are adept at handling many types of calls. They categorize reps into two categories licensed agents and customer service reps. Customer service reps handle as much of a call as possible, and pass the call on to an agent only when there is a sales opportunity. The goal is to connect the incoming caller with the best person. The training and structure ensure that all callers can immediately interact with a person who can start the process of handling their requests. Capitalizing on all customer communication types Some insurers are improving the way they handle customer communications by blending all the different types of media into a single common queue. This makes every interaction visible, including chat, email, fax, callback requests, social media, or USPS mail communications. Where companies previously deployed siloed teams to handle each media type, common queues enable insurance professionals to see a broader picture and do more multitasking. Gone are the days of the mail team, the phone team, the email team, and so on. A much more effective and efficient communication team manages the customer interface. Many insurers are finding the chat function to be an attractive new alternative for communications and a way to augment their existing processes. One southeastern US insurer has integrated a chat capability with the contact center, allowing prospects and customers to chat with an agent or a service representative. Many customers prefer to communicate via a documented chat rather than face what they expect to be long wait times and multiple transfers. The benefits are many. Service reps are able to manage more concurrent chat conversations than are possible with phone conversations. If a call does require a transfer to someone with special expertise, there is no need to repeat the conversation that has already transpired the documented transcription is passed along with the transfer. Providing context for future interactions Today, in many cases, incoming service calls are handled without proper documentation of the salient points of the conversation. Most insurers now recognize that the frustration of having to start the whole conversation over again is a major contributor to customer dissatisfaction. With the capability for automatic call transfer to an agent, especially the more advanced approaches, agents are provided with a link to the recording of the call, call notes, or even highlighted phrases and keywords that are part of the conversation leading up to the transfer. This eliminates the need for a customer to repeat information to an agent. 2013 Interactive Intelligence, Inc. 6 Best Practices in Customer Service for Insurance
One midwestern US life insurer was not taking any notes related to service calls. Often when the prospect, customer, or producer received a call back the next day, that person had to repeat the conversation to get the new rep up to speed on the situation. Now this insurer has implemented an automated system that records notes from each interaction, highlighting the important details and making them available so that others interacting with the customer or prospect can see what has transpired. In addition, proactive agent/producer notifications inform appropriate parties that communication has occurred, and the call notes or voice recordings are immediately available for their use. Creativity in customer service response Innovation and creativity in the customer service process is critical to enhancing the insurer s value in the eyes of the customers, as well as improving efficiency. Insurers are applying new technology-based approaches to speed up the response time to customers and agents, and to free up expert resources so they can focus on the most challenging customer issues. Automating customer service responses Insurers are finding new ways to automate responses to agent calls. Many insurers find that it is important to provide a help/support center for agents and producers. High volumes of questions come into these centers and often the agents want an immediate response. Staffing the contact center to provide accurate and timely answers to these questions is a major challenge for many insurers. One inventive life and annuity insurer has created pairs of questions and answers to be used by customer service representatives for responding to simple questions. Using a Google-like site, those handling agency questions can perform searches that tap into a database containing nearly 9,000 Q&A pairs. The Q&A pairs cover a wide variety of agent call topics including products, policies and procedures, state regulations, and even tax information. This insurer is already experiencing the benefits. The time required for new hires to gain the proficiency to manage phone calls on their own is now 15% faster than it was without the search capabilities. Because customer experience is such a critical competitive factor, this insurer invests in significant classroom training for new hires. With the availability of the search function, the overall training time has been reduced from 13 weeks to 10 weeks, a major improvement in resource productivity. A plan is in the works to expand usage, making the searches available directly to agents. To accomplish that goal, the first step for this insurer involves working on the wording of the questions and answers to make them client-friendly. They are also monitoring the questions that agents ask, especially those where the Google-like search does not produce an answer, and then determining how to build an answer. In the process, they are looking at factors that contribute to finding the appropriate answer terminology, synonyms, common misspellings, etc. Every Q&A pair goes through a review and approval process to ensure compliance with regulations. 2013 Interactive Intelligence, Inc. 7 Best Practices in Customer Service for Insurance
Improving response to returned mail High volumes of paper communications are still part of the insurer interactions with policyholders and agents. Many insurers are seeking ways to reduce costs and improve the handling of returned mail. One insurer is using a clever approach to managing any mail that is returned by the postal service. Every outgoing piece of mail is barcoded. Any returned pieces of mail are routed directly to a third-party imaging service, where they are scanned, and then electronically routed to the appropriate agent or service representative for investigation. This approach has significantly reduced the time needed to detect and correct address errors and ensure that prospects and customers are being reached. Providing extra care for the most important touch points Compared to many other industries, insurers have relatively limited opportunities to interact with their customers. Accordingly, touch points are exceptionally important to the policyholder; they can involve much more than just a transaction. This means that insurers have an opportunity to solidify customer loyalty when they are able to provide extra care at these critical touch points. One homeowner s insurer sees interactions during the claims process as their most important touch points. As they would say, we don t sell insurance, we sell loss recovery. According to a recent study, when policyholders have a poor claims experience, more than a third are likely to switch their business to another insurer. Consequently this insurer s preventive measure is to respond to all FNOL submissions within an hour. For most insurers, billing inquiries and transactions make up the bulk of their service transactions. Industry data shows that 90% of insured parties never have a claim; hence their major interaction with their insurer is in the context of a billing transaction, query, or issue. Leading insurers are recognizing the importance of communications related to billing, and are redesigning statements, offering electronic billing options, and increasing focus on service inquiries and requests related to bills. Dynamic and flexible resource management Insurers want to be able to better manage resources and dynamically shift work to available and appropriately skilled resources. The needed flexibility has implications for internal efficiencies and human resources management, but more importantly, it enables insurers to put their best face forward for interactions with customers. Deploying virtual agents Insurers are deploying web-based desktop capabilities and soft phones that allow them to add or remove virtual agents on an as-needed basis. This gives them the flexibility to use home-based agents that are physically located anywhere in the world. These organizations can shift work based on agent availability, labor cost advantages, or geographic demands. Calls can be routed by skill, time zone, or other attributes. 2013 Interactive Intelligence, Inc. 8 Best Practices in Customer Service for Insurance
Virtual agents can play a key role in providing after-hours contact options. For example, one personal lines auto insurer considers the addition of a vehicle to an existing policy an extremely important touch point. These transactions often take place at night or on weekends the time when the insurer s business offices may be closed. Insurers are paying special attention to ensuring that agents are available and equipped with the tools and information required to help customers get what they need on an immediate basis. Improving call handling with CRM integration The call handling intelligence provided by many communications solutions minimizes handling times, reduces costs, and improves caller satisfaction. Coupling this intelligent handling with CRM systems provides even more value. Automatically pre-populating information from CRM systems provides data and insight that has been captured via other channels. This makes it possible for agents to skip questions, making the customer response process more efficient and effective and less annoying. Advanced reporting and analytics Insurers are focusing on optimizing the customer experience delivered via their call centers and using sophisticated analytics to help them ensure that performance levels on all systems are where they should be. Many have implemented quality assurance programs in the call center to review calls and score performance. With this insight, they are able to provide customized coaching sessions and address any process inefficiencies. Leveraging contact center analytics across the enterprise One insurer described their process of using sophisticated customer analytics: taking all data from the phone system and dropping it into a data warehouse. With this information, they are able to build a model that each user community (underwriting, claims, billing, etc.) can use to evaluate the effectiveness of people and processes. Capitalizing on customer interaction data Some insurers have charged a business process analytics group with the responsibility of measuring the customer lifecycle and identifying milestones, such as life events and claims history, that can be used as input for the rating process. They are tracking how policyholders and claimants deal with their company, capturing call traffic data as well as electronic interaction insight. Using this information, they are able to rank customers based on profitability, age of the policy, and relationships. They can also make use of the information to determine which stages of the lifecycle are most profitable for the company, how that should affect rates, and what types of service are appropriate at different points. 2013 Interactive Intelligence, Inc. 9 Best Practices in Customer Service for Insurance
The Next Generation of Best Practices Many of the best practice examples provide insights into how insurers can significantly enhance customer service. Building on and expanding these examples will enable insurers to progress toward the next generation of customer service. The technologies and know-how required to create the next generation of best practices are here today. The new capabilities should be designed and built with three goals in mind: achieving true multichannel integration, delivering a best practice customer experience, and capitalizing on the future contact center. Achieving true multichannel integration We live in a multichannel, multi-device world. For insurers, this means that they must support any communications approach that the customer would like to use whether web, mobile, voice conversation, IVR, or agent interaction. Insurers must recognize this reality and design integrated systems that support the different channels. While the user interface and nature of the communication will differ, the transaction processing systems and databases should be unified. This does not mean there is only one backend system. There will need to be different systems to support the wide variety of transactions relating to different parts of the business such as distribution, underwriting, policy/member service, and claims. The key is to design with integration in mind. The design should focus on the customer experience at the front end rather than the needs of the individual systems at the back end. It is important to understand that an individual customer does not necessarily have a single preferred channel approach. A more typical scenario is that an individual will intersperse communications among a variety of contact types checking product information on the web, then calling an agent, followed the next day by an inquiry via smartphone. This means that insurers must discuss channel preferences with customers, capturing contact information and the permission to communicate using the channel(s) desired by the customer for each transaction type. One element that is often overlooked in the quest for improving the customer experience is the integration of the contact center with the rest of the enterprise. Contact centers are very often organizationally and physically separate from other parts of the company, cordoned off with a welldefined set of responsibilities. Despite the separation, contact centers play a central role in customer interactions. Delivering a best practice customer experience The ingredients of a great customer SMA experience include advanced technologies, the right information available on demand, and systems that enable a unified and seamless view of the customer. Leveraging advanced technologies for mobile, collaboration, and social media is imperative, because they are part of the experience many customers expect. Today the customer dictates which mobile devices, collaboration technologies, and social media capabilities must be supported not the company. 2013 Interactive Intelligence, Inc. 10 Best Practices in Customer Service for Insurance
Supporting various technologies and customer communication modes is just the start. The next step to a great customer experience is all about the information. Insurers may receive inbound communications from many sources, but they should be able to rapidly access or assemble the best information to present back to the customer whether that returned information is to a tablet screen, via a text-to-speech interface, or delivered voice to voice by a contact center rep. The advanced technologies and the right information combine to create the optimum customer experience when the systems in the background are unified and present a common, single view of the customer. The best design and organization for systems is one that allows insurers to integrate everything that touches the customer. Capitalizing on the future contact center One element that is often overlooked in the quest for improving the customer experience is the integration of the contact center with the rest of the enterprise. Contact centers are very often organizationally and physically separate from other parts of the company, cordoned off with a well-defined set of responsibilities. Despite the separation, contact centers play a central role in customer interactions. In some cases, a single contact center may touch every major part of the business that interacts with customers and agents. Forward thinking insurers are extending the view of the contact center back into distribution, underwriting, policy service, and other areas of the business so that they are able to support a holistic view of the customer. In many cases, the most advanced integration of new technology and channel options is occurring in the contact center. Advanced approaches including media blending, automated responses, and real-time interaction analytics are commonly being implemented in contact centers. Other parts of the enterprise may be able to learn a great deal from the experiences gained in the contact center. Extending these capabilities across the entire enterprise can create a strong base for enhancing interactions and moving customer service to new levels that yield measurable results. 2013 Interactive Intelligence, Inc. 11 Best Practices in Customer Service for Insurance
SMA Call to Action Excellent customer service is vital to an insurance company s current and future success. For many insurers, the contact center is the central hub that handles many of the customer service interactions that take place over the lifetime of a customer s relationship with the company. Insurers that want to mature their focus from an individual transaction orientation to a more productive integrated series of interactions should be undertaking three key steps. The first step is to develop business strategies that will elevate customer service beyond individual departmental areas and transactions. Innovative insurers are establishing senior executive roles or cross-functional groups with responsibility for the customer experience. These individuals and groups are being charged with looking across the enterprise and taking an outside-in view of company interactions. Strategies emanating from the customer experience exec/group should then be embedded into the plans for every business area that touches the customer. The second critical step for insurers is to step back and take a strategic view of their contact center operations. Rather than view the contact center as a cost center that handles specific types of transactions, insurers should evaluate the experience and technologies that contact centers are using to improve customer interactions throughout the company. The third step is to make certain that all implementation plans fully consider multichannel integration requirements, as well as the full impact of every process on the customer interaction. Taking this disciplined approach will enable insurers to be leaders in customer service, and position them to create new best practices for customer service in insurance. Interactive Intelligence Perspective It is no surprise that the value of the customer experience is increasing for both the policyholder and the carrier. With various communication channels available to us and increased visibility into every aspect of our daily lives, our expectations as consumers have changed and we are demanding more from those who serve us. Insurance carriers are among the masses of companies who must find innovative ways to improve the customer experience in order to remain competitive and retain existing business. Some of the outlined best practices and the implementations associated with them will come more easily than others. Most carriers will recognize the need to seamlessly transition from channel to channel to avoid frustration, and will create a strategy to ensure information is shared between transfers. Additionally, many will see value not only in automated inbound interaction handling, but also in proactive outbound notifications, to help decrease risk or simply provide outreach to policyholders. And, it goes without saying that almost everyone will recognize the value in response time for both policy services and claims handling, but possibly even more importantly, new business and quote processing. 2013 Interactive Intelligence, Inc. 12 Best Practices in Customer Service for Insurance
With that said, the most important part of starting this transition is what many unfortunately overlook the voice of the customer. After all, these changes are being made to better serve the policyholders and agents. Finding out how and when customers want to communicate with a carrier is the best way to jumpstart a change in customer service. Not only will some customers be impressed that their opinion is valued, but the insight gained will allow for a more successful implementation of new technology and services that will prove beneficial for everyone. When presented with the idea of a multichannel customer service approach, the benefit is recognized immediately; however, the implementation may prove overwhelming. Which channels need to be implemented, which transactions are available through different channels, and how as a company will all of these channels be tracked and managed? These are all valid questions. Policyholders may prefer voice communications for endorsement requests, but self-service options for basic status updates or mobile applications for premium payments. It is important to implement the channels and processes that are going to be valuable to policyholders, but also feasible for the carrier to implement and maintain. The best way to determine this is simple: just ask. Customer feedback is one of the best tools to help ensure implementations are not overcomplicated with communication channels and features that are not needed, or even worse, a lack of service that is in fact needed. Carriers must also recognize that feedback is not only valuable in the planning stages for new communication offerings; it can prove beneficial at any step in the process. Channels that were once handled in an effective and efficient manner may now prove cumbersome based on product or personnel changes. The customer experience will continue to evolve, as will the expectations. The best, best practice for any of these implementations may be that in knowing the customer and recognizing their expectations, the carrier will be able to leverage the available resources to create a customer experience that will set the business apart from any other. 2013 Interactive Intelligence, Inc. 13 Best Practices in Customer Service for Insurance
SMA Strategy Meets Action Exclusively servicing insurance, SMA is a strategic advisory firm offering a unique blend of research, advisory, and consulting services to insurance companies and IT solution providers. By leveraging best practices from both management consulting and research advisory disciplines, SMA s advisory service offerings are actionable, business driven, and research based where strategy meets action. This white paper is based on SMA s experience, research, and insights. Interactive Intelligence has purchased the distribution rights to this research and white paper. This is not paid-for research. Additional information on SMA can be found at www.strategymeetsaction.com. Mark Breading, SMA Partner can be reached at mbreading@strategymeetsaction.com or 1-614-562-8310. Follow Mark on Twitter @BreadingSMA. Interactive Intelligence, Inc. Interactive Intelligence (Nasdaq: ININ) is a global provider of unified business communications solutions for contact center automation, unified communications, and business process automation. The company has developed an all-in-one IP communications software suite that s scalable and standards-based, offering a single-platform architecture with inherent multichannel processing. This approach allows Interactive Intelligence to deliver comprehensive applications minus the cost and complexity introduced by multipoint products. Founded in 1994 and backed by more than 5,000 customers worldwide, Interactive Intelligence is an experienced leader in delivering premise-based and on-demand Communications as a Service (CaaS) offerings, including software, hardware, consulting, support, education and implementation. 2013 Interactive Intelligence, Inc. 14 Best Practices in Customer Service for Insurance
The Author Mark Breading, a Partner at SMA, has more than 25 years of insurance and information technology experience in a variety of leadership roles. He has had both technical and business roles in sales, consulting, marketing, and business strategy, including roles as IBM's Global Insurance Strategist, Global Insurance Marketing Leader, and Director of Global Executive Conferences for insurance and banking. In these roles, he has advised C-level executives around the world. Strategic account planning and partnership strategies are two specialty areas for Mark. He developed and implemented a methodology for strategic account planning for IT solution providers to increase penetration in key accounts. Mark has also led the development of joint partner strategies for insurance IT solution providers. In addition, Mark founded Strategy & Marketing LLC, a firm providing strategic consulting services to the insurance, banking, and information technology industries. As an independent consultant, he has advised IT companies serving the insurance industry. Mark is a graduate of Bucknell University with a BSBA in Accounting and a graduate of IBM's Systems Research Institute with a major in Software Systems. 2013 Interactive Intelligence, Inc. 15 Best Practices in Customer Service for Insurance