Here is my story about ways to better serve customers in the insurance industry. And to be clear, I mean it in the naive earthling sense -- practices that improve how insurers perform a service for their customers.
Use Change Management to Digitize Customer Processes
Customer service is a top priority these days for insurers, and efficiency is the biggest challenge for executives who manage customer-facing operations according to 88 percent of those recently surveyed by CEB TowerGroup. Further, according to TowerGroup insurance analyst Sam Stuckal,
The concept of back-office efficiency driving front-end service excellence has never been more in focus than it is today. Key issues remain unresolved, including heavy dependence on paper and low levels of digitization. In fact, one top-tier US life insurer estimates that only 5 percent of their operations are digitized.”
In turn, powerful benefits are realizedwhen a change to digital is enabled. Companies are spending countless cycles, applying valuable resources and making significant investments, all focused on ways to better serve their customers.Change is clearly needed, but how to accomplish that change is the question.
As a recovering Six Sigma “Green Belt,” I know that process improvementmethodologies and software are a big part of how change can be realized. But as in so many endeavors, success lies not only in first achieving the technical improvements, but also in ensuring the changes can endure. If you don’t pay attention from the start to making change stick, then the advantages you’ve gained from process improvement initiatives like Lean, Six Sigma and BPM (business process management) will eventually disappear.
Perhaps a cookbook approach that helps make and sustain change is in order to better serve customers? CAP -- Change Acceleration Process -- is a discipline I used extensively at General Electric to drive operational efficiency and productivity improvements in the business.I recommend checking it out and using it in conjunction with your chosen process improvement methodology.
User process acceptance is one of the fundamental principles underlying CAP. CAP is focused on overcoming resistance to change and increasing the success of change efforts by emphasizing not just the quality of the technical solution, but also the role that stakeholders play in process change. CAP centers on the need to consider how people will embrace, accept and adopt change resulting from your process improvement efforts.
One of my favorite success stories that illustrates this principle is Irish Life, one of Ireland’s largest and most successful financial organizations. Irish Life faced excessive turnaround times managing over half a million policies. There was no visibility of where work was in the process and the number one customer complaint was response time. Irish Life’s BPM solution removed paper from its processes and integrated the policy and supporting documents into the process flow, resulting in improved customer turnaround time and consistency, management visibility into all work statuses and a 35 percent improvement in productivity.
Further, realizing that the key to sustained success is engaging stakeholders, Irish Life included their process participants and stakeholders in the improvement initiative. By focusing on both the internal and external “customer,”Irish Life changed “how the work gets done.” In effect, they improved the worker experience, rather than merely adding speed to old and potentially ineffective ways of working or worse yet, changing the work without regard to the user view. From a people perspective, the system has made a huge impact. Employees have recognized and embraced the improvements being driven by the solution, and to date no backslide is evident.
Create Compliant, Yet Flexible Customer-Centric Processes
Insurers are under increasing scrutiny from consumers and the social media.In turn that is driving them to manage their risk and cost by improving their customer-facing processes. Success requires a customer-centric not channel-centric approach, and a process that is both compliant and flexible forefficient exception handling.
A recent Consumer Reports customer service survey evaluated home insurers based on criteria such as agent courtesy and timely payment. Claims pricing was the top priority among respondents;the importance of a problem-free claims experience was second.Amica, who ranked first in the survey,is a long time proponent of personalized face-to-face interaction, but now recognizes that many consumers now prefer digital communications. In order to stay ahead, it has adjusted its strategy to provide easily accessible information to consumers, including web and mobile as high areas of focus.
The claims communication process is well known as the “moment of truth” for insurance customer service.Insurance companies spend nearly 80 percent of their income on claims.Claims service requests not only directly impact customer satisfaction, they indirectly impact revenue. Studies have found claim settlement times are directly correlated to the severity of the claim and the acceptance of the payment as appropriate, so timelyefficient processes are a must.
When insurers invest in a case management approach they organize work around the customer with processes that can efficiently handle exceptions and operate in an omnichannel world.Case management establishes guardrails, not edicts for work, lending necessary flexibility when straight-through process automation is impractical.Case management technology can deliver intuitive, context- and content- aware process applications that are both efficient and flexible to support the daily work of process participants that serve customers. This includes richer “workbenches” for knowledge workers, integration of social technologies -- such as improved collaboration tools (including cloud-based collaboration) -- and improved support for process participants via capabilities such as mentoring and self-adjusting processes, as well as support for event triggered paths that are flexible, yet compliant.
For example, in a health insurance case study I am familiar with, when a customer calls to dispute a rejected claim, the claim -- that was otherwise on a path to be archived -- must now be reviewed in an Appeals process instead of proceeding on the standard path. The claim documentation along with medical records can be reviewed by doctors on both sides of the disagreement, and can be completed within a mandated time period. The case folder can advance through events, both externally and internally. External events that move a case include receipt of a phone call, letter, fax or email related to the case, where the contents of that message are added to the case folder, and new tasks or processes may be created. The exact process is different every time but the deadlines don’t change.
Property/casualty insurance subsidiary at Crédit Agricole has multiple claims handling sites and considers claims handling to be at the heart of its organization. Quality of service, proximity to policyholders and personalized customer service, together with a firm grip on underwriting costs, are the key aspects of their claims handling system. Centers handle more than half a million claims yearly with a customer satisfaction rate of 95 percent.In practice, policyholders deal with a single contact person until their claims are settled, including any exception handling.With case management, every document belonging to a customer dossier can be retrieved, viewed and shared online in a highly productive environment for the claims worker, and with claim status and load level visibility for management.
Focus on the Mission, Not the Technology
At an innovation event I participated in in Washington DC, a panel addressed what it takes to improve organizational performance. One outstandingpiece of advice was to “focus on the mission,” not the technology.While technology will be critical you need to avoid the temptation to get sidetracked by the bells and whistles of cool tech features. That message rang true for me and reminded me of another panelI heard a few years back at a major BPM Summit.
For those who have been immersed in the world of process improvement, BPM and case management, we hear any number of reasons WHY the discipline and its related technologies are worthy of pursuit. At the summit, I heard one of the best reasons ever from Wendy Kimball, the director of customer care at Vision Service Plan, as to why she undertook a customer service process improvement initiative: "It’s about honoring the customers’ time.”
Delivering process improvement means making changes in your enterprise and most often, the biggest challenge is to know where and how you can make a meaningful impact. By starting with the mission and a focus on being outcome-driven, your objectives are always in sight (no pun intended). In the VSP example, their case implementation empowers their CSR agents, enabling them to balance demands for compliance with the ability to apply personal judgment to create the best customer experience, in a timely and effective fashion.
3 Best Practices
I hope you find the practices I’ve shared to be helpful in your customer focused process improvement endeavors.
- Irish Life discovered the best way to make change stick is to include stakeholders from the start.
- Crédit Agricole learned that when you organize work with customer-centric processes it creates compliant, efficient and flexible claims service.
- VSP found that focus on the service mission leads to the right technology choices.
I’d like to hear about your experiences.What are you doing to move the needle on better serving your customers?
Title image by Andrey_Popov (Shutterstock)