Business leaders at American National Insurance Co. checked under the sofa before sitting down to assemble the customer relationship management (CRM) jigsaw puzzle. Why? Because they wanted to make sure they had every piece.First, the business units of the Galveston, Texas-based ANICO defined their CRM vision as precisely as possible. Next, the company selected Pegasystems, a software provider they say has delivered the proper CRM technology for their specific needs. Third, the insurer formed a team of committed customer service employees who meet regularly to share knowledge and guide the CRM effort.

"All of these things coming together made our success with CRM technology possible," says Gary Kirkham, ANICO vice president and director of planning and support. The CRM systems help the people who answer the phones find information, conduct interviews, follow up on requests and make proactive calls. Similar tasks are automated through some of the division's Web sites.

IT management

ANICO's internal IT division operates as "a business within a business," Kirkham says, because the company's business units have the option of accepting internal proposals or going outside the company for assistance or solutions.

That means the CRM approaches created internally have to match or beat the features, development costs and operating expenses achieved by third-party vendors. The operating units look closely at how investment decisions affect budgets and profit-and-loss.

"It's incumbent upon us to have great numbers when it comes to providing solutions and availability of service," Kirkham says of his division's competitive situation. That's getting a little easier these days. Every time another segment of the company begins using business process management software from Cambridge, Mass.-based Pegasystems, the conversion is quicker and easier because ANICO re-uses some of the modules already in place.

ANICO is using PegaWORKS as its core workflow engine, PegaCONNECT to gather information from various sources in the company and PegaWEB for Internet access, according to Earle Tutunjian, Pegasystems manager of strategic alliances.

Developing and maintaining the software in-house at ANICO would have cost too much. "Building a complex, general-purpose solution from scratch was not a consideration," Kirkham says. The Pegaysystems solution supports three call centers and a self-service Web site.

The first ANICO unit to begin incorporating the software was the Health Division, which operates a consumer call center where customer service representatives (CSRs) field questions from policyholders. The carrier chose that unit to go first because the potential for improving CRM was greatest there-the group accounts for 46% of all the calls ANICO receives from customers. Management also knew that introducing the system would take several months given the department's complexity.

ANICO's Credit Insurance Division, a unit with a strong history of providing top-notch customer support, was the next unit to implement Pegasystems' solution. The callers, who represent credit insurance at car dealerships, furniture stores and other purveyors of big-ticket merchandise, serve as ANICO's representatives.

The software went online in the Credit Insurance Division in 1998-making it the first working Pegasystems application at ANICO despite the Health Division's head start.

A quick win

"This had the potential to be a quick win for us," Kirkham says. "Division leadership had clearly and concisely articulated the needs and issues. Credit Insurance was a precisely targeted effort that came up very quickly and very clean. This division had a well-defined CRM approach, and we were able to automate quickly what already worked well."

The Multiple Line Life Insurance field support center was brought online to work more efficiently with captive agents. Before Pegasystems was brought online, corporate process knowledge resided in the collective memory of just three people. That information was captured and incorporated into the workflow and business rules of the software. New people were then trained by the original group of three. A focused field support staff now delivers that specialized knowledge to agents. More agents are being serviced at a lower cost with higher consistency, Kirkham says.

Because of business demands, ANICO quickly converted Multiple Line to the software to accommodate a new property/casualty company acquired the previous year. Now, the Life Customer Service operation is developing its CRM objectives and installing the software.

Heads of the direct marketing and seniors marketing divisions still haven't decided whether to invest in the new approach. "As they further develop their CRM strategies and approaches, we will make sure they are aware of the benefits and advantages of this solution," Kirkham says.

If those groups choose the new methods, they're likely to follow the examples of their predecessors by setting CRM objectives at the outset.

Much of ANICO's success with CRM has come about because of clear ideas of what customer service reps should accomplish and how the software should aid them, Kirkham says.

Achieving goals

"Our business units are really on board on to how to best use this product," he says. "Every business unit could easily state in a paragraph what it wanted to achieve. Our business units could see the power of the technology. They articulated business solutions, and we used the technology to enable that solution."

In the Health Division, for example, management wanted to reduce the "abandon rate." ANICO was losing too many callers because of long waits.

The Credit Insurance Division needed a CRM system geared to answer the 12 questions most frequently asked by the people who call.

In the Independent Marketing Group-where CSRs work to strengthen ties with agents who have the freedom to sell insurance from a number of carriers-the head of the unit envisioned a system that would let CSRs know the past performance of each caller: One caller might be a new agent who needs encouragement and the next a veteran producer deserving praise.

"They needed the ability to develop personal ties with that agent," Kirkham explains. "This meant marrying the results from the division's data mart with the call center. The results have been remarkable. The software also helps the division manage outbound calls for tasks like congratulating a new agent on making a first sale."

ANICO is taking full advantage of such features, says Pegasystems' Tutunjian. "ANICO saw how the technology could be applied to many businesses," he says. "They take the broader view-they're visionary in that regard. They didn't pigeonhole the technology."

As ANICO tracks the results for customer service, the numbers get better every quarter, Kirkham says, because of the combination of talented employees, well-conceived processes and the right software.

The percentage of calls answered within a certain time frame has improved annually, while the "abandon rate," and "average speed of answer" have shriveled each year.

For example, the abandon rate improved 71% in 2000, 54% in 2001, 37% in 2002, and 58% in the first three months of this year. Moreover, the average speed for answering inquiries improved 61% in 2000, 38% in 2001, 45% in 2002 and 52% during the first three months of this year.

Kirkham acknowledges, though, that challenges continue to arise. "The better you get, the more people expect," he says. "The customer's view is that you're only as good as my last great experience."

Ed McKinley is a writer based in Chicago.

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