If a slightly improved economy is lulling insurers into a sense of relative security concerning their customer-base, they need to think twice, according to a new report by Boston-based Celent. The report, “Insurance Customer Service Trends in North America,” notes that it has never been more important to keep the clients insurers have.”
The report, which examines the processes and technology in use in North American insurance companies, conducted detailed data analysis by talking to key carriers that could provide a snapshot of the organizational structure, skills, and automation employed to gain competitive advantage through outstanding service delivery.
“The current economic environment and the outlook for the near term to medium term make organic growth and customer retention critical,” notes the report. “Other than acquisition, the only way grow is to take business away from a competitor.”
According to Celent, improving customer service is a logical response to current challenges faced by insurers. “It is a battleground for some companies as part of their chosen competitive strategy. For all others, it is table stakes,” notes the report. Celent survey data indicates that investment in the customer service area will increase in the next budget year (2011). More than 70% of the respondents indicated that investment in customer service technology solutions will increase in the next three years.
Based on feedback from survey participants, Celent has identified numerous opportunity areas:
1) The most common delivery method is a multifunction center with customer service representatives that have generalist skills with one or two specialty areas.
2) Reducing the number of handoffs in a single service call is a key area of focus across companies.
3) The technology in use is described as having low levels of integration; "extensive use of shared folders on shared drives" is a common feature.
4) Current technology is not a leverage point in most companies; only one-quarter of the participants rated their customer service technology as "very good."
In order to address customer service more effectively, Celent believes insurers should simplify processes for CSRs: Instead of layering on additional systems to solve specific problems, look for ways to consolidate systems. An effective approach identified in the research is to build or purchase tools that provide a service workbench and a single user interface for the CSR. In addition, it will be useful for insurers to eliminate the "cheat sheets" and notes that are often posted in and around the telephone at a CSR's desk. This can be done by improving the data integration between systems and adding data validation edits early in the process. Celent also recommends that technology solution providers deliver solutions that integrate existing automation and subtract from, rather than add to, the number of systems a CSR has to access during a call. They should also introduce automated workflow into solutions which will allow a service area to set up and maintain the service environment. “The goal should be to allow customer service to manage its work without depending on IT,” notes the report.
"Going forward, the pie is going to get smaller," says Mike Fitzgerald, senior analyst and author of the report. "Market growth will likely be below historical norms, making client retention and account rounding more critical than ever. Premier customer service delivery contributes to these goals.”
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Corrected October 27, 2010 at 9:50AM: yes