It's been a tumultuous year for Safeco Corp. In January, former CNA executive Mike McGavick was named Safeco's new president and CEO. In July, Michael LaRocco was appointed president and chief operating officer of the insurer's $2.6 billion personal insurance business. And in September, Yom Senegor, from Accenture, was named CIO.

Also in July, Safeco announced a 10% workforce reduction, 1,200 positions, by the end of 2003. Further aggressive action is expected from the new executive team-to eliminate losses that have plagued the Fortune 500 company in recent years.

Nevertheless, the Seattle-based carrier has achieved some noteworthy success. Safeco's property and casualty call center operation has been going through massive changes over the past two years, with impressive results. Call volume has essentially doubled since 1998, for instance, but the contact center has only had to increase its staff by 15%. Training time for customer service representatives has been reduced from three to six months down to eight to ten weeks. And CSR morale measurements are higher than the industry benchmarks.

These gains have been achieved by implementing structural, operational and technological improvements. Most notably, the P&C contact center has consolidated 28 independent call centers in nine cities into one "virtual" contact center, which comprises four state-of-the-art facilities-in Bothell, Wash., Spokane, Wash., Indianapolis and Denver.

In addition, the virtual contact center is equipped with a bevy of new best-in-class technologies:

* Toronto-based Nortel Network's Clarify client account manager for customer service representatives' desktops. (Nortel announced Oct. 2 that it has agreed to sell its Clarify assets to Amdocs Ltd.)

* A centralized workforce management tool from IEX in Richardson, Texas.

* An interactive voice response (IVR) system from Santa Clara, Calif.-based Edify Corp.

* A skills-based, call-routing system from Lucent Technologies, Murray Hill, N.J.

* CallPath computer-telephony integration from Genesys Telecommunications Laboratories Inc., San Francisco.

* Web chat and co-browsing and e-mail management capabilities from San Jose, Calif.-based Cisco Systems Inc.

Plans On temporary hold

In the original three-to-five-year plan, the P&C contact center would become a profit center in 2004 or beyond-by enabling call center representatives to cross-sell and up-sell products, by paying simple claims over the phone, and by directing customers to appropriate low-cost channels for service, for example.

That original plan is on temporary hold, however-pending the new corporate strategic plan expected to emerge any day from the executive suite, according Greg Bland, Safeco's director of contact center operations administration.

At press time, it was too early to tell what Safeco's corporate contact center strategy would be, according to Chris Villiers, a Safeco spokesperson, who declined to grant an interview with Safeco's new CEO or CIO. The executives may be ready to discuss their strategy at a later date.

Despite the uncertainty about the future, the changes made to the P&C contact center so far have been a definite improvement.

Drivers for change

The overhaul was driven by three dominant concerns. At $12, the cost per call in 1998 for Safeco's P&C operation was higher than the industry benchmark of $8. Customer service levels were inconsistent in the different locations. And the company anticipated an increase in call volume as a result of its 1997 purchase of Indianapolis-based American States Insurance (see chart).

"In 1999, we identified the problem," Bland says. "Then in 2000-2001, we started reinventing ourselves." The change involved much more than moving into four new locations. "We knew that to operate in the new way, we had to re-do everything-the way we train people, the workflows we use, everything," he says.

Customer service representatives' jobs changed considerably. Prior to last year, they were scattered across the various locations in departments that operated independently. "If you were taking claims, you had a skill set, but we didn't know that's what it was," Bland says. "You were (simply) in a department taking calls."

By using a workflow mapping methodology, approximately 60 people examined all call center work in all locations, and redesigned the reps' jobs into three basic skill sets: claims, billing and policy services.

Now, all CSRs begin working in claims, and after proving they've mastered those skills to specific performance measures, they can choose to learn additional skills in billing and policy services. For each new skill set they acquire, they receive a 10% salary boost.

In the old operation, customer service representatives had no career path, Bland explains. "If you wanted to move up, learn more or earn more, you had to leave the department you were in, and move to another department where you would do billing, for instance. And you didn't handle claims anymore."

In addition to cross-training customer service representatives, Safeco also has virtual routing, which is a unique combination, according to Bland. "A lot of call centers have virtual routing, and some have multiskilled reps. But not very many combine the two."

Prior to the transformation of the P&C contact center, Safeco had separate phone numbers for each location. Now, the P&C contact center has one toll-free number for policyholders and another for agents.

Calls made to those numbers are "virtually" routed through the IVR system, which automatically sends callers to a rep with the skill set needed to service the call. Best Services Routing (BSR), a Lucent technology, enables Safeco to balance call loads between the four sites.

"We use a post-routing strategy," says Nick Callahan, Safeco's systems manager of contact center technologies. This means that calls are distributed to the four sites, and when a call lands at a site, BSR looks up the estimated waiting time. The system then checks with the other three sites to determine if the call can be serviced more quickly by a rep with the proper skills at one of those sites.

CSRs' desktop technology has been upgraded as well. As a rep receives a call, computer-telephony integration simultaneously routes the call along with a Clarify screen showing a customer's call history and policy and claim information.

The four call center facilities are also colorful, with personal, fully adjustable, hydraulic workstations, refreshment stations, quiet rooms and a game room.

The morale boosters seem to be working. A benchmarking study showed that Safeco's CSRs adhere to their schedules 94.3% of the time, while the industry average is 86.2%. And Safeco's CSRs have a 94.7% attendance record, compared with 88.8% for the industry.

The command center

New technology is also assisting contact center managers to manage more efficiently. In particular, Safeco has installed a centralized "command center" at its Bethell, Wash. facility, powered by IEX's TotalView workforce management system.

Similar to an air traffic control room complete with video monitors, analysts view call volume, call handling times, and provide forecasts for the future for all four sites. Armed with this real-time data and analysis, the P&C contact center is able to schedule customer service staff and determine hiring needs at each site with much more accuracy.

"In the past, we kind of knew we received more calls in the middle of the day and fewer in the evening, but it was 'finger-in-the-wind' staffing," Callahan says. "We'd have periods of time when people would be sitting around, and other times when they'd be totally slammed."

Now, the contact center can determine, for example, that between 10 a.m. and 12 noon, it typically receives 3,000 calls-and 20% are in billing, 10% are policy and 70% are in claims, he explains.

Hiring was also a hit-or-miss proposition, Bland says. "Now we know 30 to 90 days out if we're going to need to hire. And we can hire 10 people at one time and train them together. It's much more methodical."

The workforce management system enables Safeco to measure CSR performance, but the focus on speed and accuracy is tempered by a new leadership style. "We need to have measures-because this is an expensive process and we want to be efficient," Bland says. "But we need to do that with a coaching mentality."

That's because an insurer's contact center takes claims and deals with accidents and fatalities, unlike call centers in other industries, which take orders and make reservations, Bland notes. "We need to do a quality job with these calls. We can't be completely numbers-driven."

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access