Insurance

Speed is an important call center objective for American National Insurance Co. because "shaving a minute here or 30 seconds there makes a big difference in costs when you're running a call center," explains Gary Kirkham, vice president and director of planning and support for the Galveston, Texas-based insurer.Yet, flexibility is at the core of the steps that guide customer service representatives (CSRs) through conversations with callers. A key to managing call center conversations resides in workflow-helping the CSR pace the conservation and guide it in the desired direction.

Everyone knows the numbers by heart: Insurance fraud costs property/casualty carriers an estimated $27 billion each year, or roughly 10% of premiums collected.The tricky part is detecting fraud so that some of those losses can be redirected to the bottom line. In the world of auto repair, fraud rears its head higher during dicey economic times like now when folks are hurting for money.

Fraud can be subtle and complex. It can be hidden among voluminous amounts of data. New schemes are always emerging. Insurers understand the impact of fraud and consider it a serious problem.Fraud management technology that uses predictive modeling to identify suspicious claims can accurately cull out high-risk claims and label them at the earliest possible moment. It not only makes it practical for insurers to process and close the vast majority of claims faster, it focuses the adjusters review on claims that require the most attention. Lastly, it provides higher quality referrals to investigative units.

Supporting its more than 12,000 exclusive agents is at the heart of Farmers Insurance Group's CRM initiatives. The centerpiece of this strategy is a branded program called Agency Dashboard, which enables agents to obtain ongoing insights on policyholders' needs.When Farmers agents log onto the secure intranet site, located at www.eagantfarmersinsurance.com, they must key in a user name and password and then are connected to a personalized Web portal that provides real-time data and policy activity of their entire book of business.

Weak carrier marketing is one reason agents have not flocked to real-time agency-carrier transactions, according to industry sources. "Only a handful of carriers have actually told their agencies these services are up and running," says one source who wishes to remain anonymous. "I get phone calls every day from agencies saying, 'A field rep was just at my office and he didn't know anything about this.'"Carriers haven't publicized their capabilities widely, in part, because they view them as a competitive advantage, says Rick Gilman, vice president for ACORD, Pearl River, N.Y. Although ACORD is making efforts to track carrier initiatives, a comprehensive list of all carriers and the types of real-time transactions they provide does not exist.

The quiet catastrophe of insurance fraud is gaining more attention as insurance executives continue to look to operational efficiencies-rather than investment income-to protect their bottom lines.With the Coalition Against Insurance Fraud (CAIF) estimating an annual fraud cost of $80 billion dollars, the industry has realized that the harmless fudging of a million here and a million there is adding up to real money.

As a direct writer of homeowners and automobile insurance, Electric Insurance Co. doesn't rely on a network of independent agents to regularly interact with policyholders.Instead, Electric's call center agents interact with customers for everything from delinquent premium payments to claims-related inquiries. While this arrangement often suffices, CSRs typically lack the customer relationship skills that local agents have.

At Cincinnati Equitable, Web services have opened up new avenues of connectivity. Agents can now access rating applications housed within the Cincinnati-based carrier's Windows-based servers to look up territory and verify policy status.This is not remarkable news, since agent portal Web sites have been around for years. What is remarkable is the fact that this new application took two hours to set up and deploy-a process that usually took several weeks, according to Terry Brown, vice president of information systems for Cincinnati Equitable Insurance Co.

In an effort to reduce internal IT costs, more insurers are considering buying packaged software-as opposed to building customized applications.However, many executives in the industry-those evaluating packaged software solutions-may not be familiar with vendors and products that are available. Therefore, they may have difficulty assessing them.

The typical profile of a perpetrator of fraud has been that of trained con artist who plans his or her scheme in a calculated fashion. But a new study depicts insurance fraud not only as a sophisticated ring carried out by professionals but as an act often executed by mainstream insurance customers.The study, by Bermuda-based consulting and technology solutions provider Accenture, found that nearly one in four U.S. adults say that overstating the value of claims to insurance companies is acceptable, and more than one in 10 say they approve of submitting insurance claims for items that were never lost or damaged or for treatments that were not provided.

When GE Capital announced to the world that it had saved $400 million in 1999 by applying six sigma principles throughout its organization, Marla Friedman listened.Then, as senior vice president of operations at Allstate Financial, she shared this impressive news with her boss Tom Wilson, the firm's president at the time.

When it mapped out a "scorecard" listing of requirements for a new annuity administration system in early 2000, Security Benefit Group Inc. was living in the green eye-shade era of COBOL, two mainframes and "bolt-on" systems.To make matters worse, the carrier's IT department was trapped beneath a mountain of application changes.

The most important aspect of getting the back-office policy administration system up and running in eight months-without delays, excuses and empty promises-was a project protocol that Security Benefit Group followed."The piece that made it successful was project management guidelines that we followed," stresses David Keith, senior vice president and CIO for Security Benefit Group, Topeka, Kan.

The term "insurance card" is often equated with health insurance coverage, but a small and growing legion of insurers are issuing plastic to policyholders for more than just a doctor visit.Property and casualty insurers are finding advantages in dispensing branded stored-value debit and credit cards to customers for bigger ticket claims, particularly catastrophic homeowners claims.

Insurance companies have a unique set of challenges to overcome in creating efficient operations. Because of increased competition, insurers are being forced to narrow their focus to the core competencies at which they excel. At the same time, carriers must offer greater product and service offerings and faster distribution to meet increasing customer demands.And, because service industries such as insurance are so dependent on information, the increasing digitization of data is forcing these companies to redefine how they operate. Therefore, to be successful-and to prosper-in this digital environment, organizations must reshape their business models.

The insurance industry is facing a seemingly insurmountable challenge: The leading companies need to invest in new technology simply to keep pace with escalating customer claims.But the cost of replacing policy administration, claims, product management, billing, producer management and customer/account information systems is more than any one company can bear. More importantly, it is a cost that the insurer's own customers will not fund.

When it mapped out a test-pilot strategy to use e-signature software and digitize its Medicare supplement insurance forms, Banker's Life and Casualty Co. set some very lofty goals."We wanted to reduce non-value added activities, increase productivity, improve service to our policyholders, decrease unit costs, reduce cycle time and improve both compliance and suitability," says project manager Jason Uyder, a black belt in process excellence for Banker's Life and Casualty Co.

Understanding how and when consumers want to receive financial advice is an important aspect in gaining the upper hand in the competitive field of financial planning.By implementing automated systems to expand advice delivery channels, life and annuity insurers can remain competitive with other financial services institutions.

Since buying Acordia Inc. in 2001 and creating the nation's largest bank-owned insurance agency, Wells Fargo & Co. has not been a big player on the agency acquisition scene-but that should change, thanks to the deal-minded focus of the agency's new head.Acordia intends to further tie itself to its San Francisco bank parent through continued cross-selling and acquisitions in the bank's West Coast stronghold, according to the agency's new chief executive officer, Kevin W. Conboy.

If you build it, they will come. But, if you want to make sure they flock to it, ask them to design it for themselves. Essentially, that's what Zurich North America did when it began developing its state-of-the-art underwriting workstation-an integrated online platform that the Schaumburg, Ill.-based commercial insurer began rolling out last year.Currently, approximately 250 large-account property underwriters are using the workstation, which houses the company's best underwriting practices, provides underwriters access to data they need from internal and external sources, and enables collaboration and knowledge-sharing between risk engineering, claims and field offices.