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CRM Systems: One Size May Not Fit All Insurers
August 2007What do insurance, consumer goods, retail and manufacturing companies have in common? Each relies on a complex value chain of partners engaged in collaborative business processes in order to develop relationships and deliver goods or services to customers. This is true for B2B insurance companies such as Health Net Inc., Woodland Hills, Calif., and Delta Dental Plans Assoc., Oak Brook, Ill., consumer-focused organizations such as Galveston, Texas-based American National Insurance Co. (ANICO), which offers a broad line of insurance products and services, including life insurance, annuities, health, property/casualty and credit insurance and Service Masters' American Home Shield (AHS), or American Insurance Group Inc. (AIG), which serves commercial, institutional and individual customers.
Whether providing individual policies direct to consumers or a range of portfolio products to commercial or business customers on behalf of employee members, insurance companies operate within complex, process-driven environments.
The single commonality among all types of insurance companies, say experts, is their drive to reduce costs while maintaining and/or improving customer service levels.
R&R: REGULATIONS, REDUCING COSTS
These commonalities, along with insurers' ability to adhere to ever-changing regulations, lend themselves to increasing competitive pressures. According to a CRM survey conducted in 2007 by Chicago-based American Marketing Assoc., 42% of insurance companies and/or their producers (i.e. agents and brokers) use call center technology such as interactive voice response (IVR), speech analytics and hybrid click-to-call. Building processes around these three types of interaction technologies requires configuration of business rules or decision trees that facilitate sourcing the right resource quickly.
Properly utilized, automation increases productivity and customer service levels while optimizing agent time by transitioning members to a live person when necessary. Health Net was better able to service clients who requested basic information about their policies such as claims status, change in premium amounts or renewal dates through IVR with built-in speech recognition capabilities. "This allowed agents to spend more time with clients on complex questions," says Remus Siclovan, systems analyst for Health Net. "We serviced 50% of callers this way and were able to reduce both resolution time and costs."
When ANICO absorbed 200,000 new consumer customers, each with individual policies, the company was challenged with increased call volume, velocity, change in customer diversity and additional product lines. As the majority of ANICO's customers are consumers, (95%) the insurer focused on selecting a solution that could provide agents with the data necessary to service this influx. Its goal was to increase service levels while reducing costs-mainly through self-service automation (online and 1-800 call center), reduced agent training time and fewer employees.
"Due to industry regulations there is not a lot of margin to play with," says Zeb Miller, AVP, Health Administration and part of the team involved in CRM assessment at ANICO.
Compliance with regulations such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA), California State Bill SB168, which in 2002 required organizations to thwart identify theft by limiting access to Social Security numbers and credit reports, and development of National Provider Identifier (NPI) numbers required as of May of 2007, are just some of the reasons Health Net decided to deploy and manage an on-premise application. "Professional services are costly and time-consuming," Siclovan claims. Modifications such as changing Social Security numbers over to unique personal identification numbers (PIN) or assigning NPI's can be handled more cost-effectively and rapidly in-house, he adds.
Moreover, process improvements to the IVR, such as changing the menu so customers can more quickly order popular self-service items such as ID cards resulted in an increase of 75% more ID cards ordered when this option was presented to customers on the main menu instead of on a secondary menu. In addition to reducing call resolution times, use of the IVR for basic services allows the agent to focus on providing customers with higher value services.
SHOW ME THE MONEY
"Insurers should have a CRM capability for both their policyholders and their producers," suggests Barry Rabkin, senior research analyst at Financial Insights, Framingham, Mass. "However, then there's that pesky need to demonstrate ROI. A CRM investment really demands that insurers look to their future sales (up-selling, cross-selling and ever more targeted marketing) and insurance executives are too busy with today to have time for tomorrow," adds Rabkin.
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