Ask insurers about the importance of good customer service, and you’ll likely get similar responses: “It’s very important, and we pride ourselves on good customer service.”

And it may, in fact, be more important than ever. Heightened competition and more-informed and demanding consumers are causing insurers worldwide to rethink their technology strategies, according to a new report from London-based independent market analyst Datamonitor. Insurers can no longer afford to provide poor customer service, nor can they continue failing to understand each policyholder, says Datamonitor’s report. The report, “CRM in Global Insurance,” concludes that in order to remain competitive and maintain profitability, life and non-life insurers globally must expand beyond their core competency of risk management, and focus on customer management.

By focusing on the customer, Datamonitor points out, insurers will be able to identify and grow the most profitable ones, while minimizing the resources spent on the less profitable customers.

But how do those insurers really know they’re providing good customer service? The answer is metrics. And with the growing avenues of customer service—Web sites, call centers, agents, third-party providers and e-mails—insurers may struggle to keep all of it straight.

CALL CENTER ACTIVITY

The age-old source of customer service, the call center, sees a lot of action from customers, and insurers have different views of what makes a call center “good.”

“Speed remains a core quality metric for many organizations, but that is just one important facet of customer service,” says Joe Heinen, VP of corporate marketing at Daly City, Calif.-based Genesys Telecommunications Laboratories Inc.

Efficiency and accuracy when addressing the customer’s issues are just as important. In fact, a recent Genesys survey of C-level executives in a variety of industries, including insurance, shows that most executives underestimate the emphasis their organization places on efficiency, and overestimate how easy their organization makes it for customers to purchase during interactions. For example, 55% of the C-level executives polled believe their operations use the average speed to answer as a critical metric, compared to 70% of customer service professionals. On a worldwide basis, 67% of all organizations considered this a key metric.

The Genesys report, “The Executive Disconnect, The Strategic Alignment of Customer Service,” also discovered that among C-level executives, 41% think they measure the experience in self-service by quality rather than just cost savings, but only 35% of customer service professionals think so. At the same time, 36% of the executives think their customer service is measured on revenue per call, when in reality only 28% of customer service professionals validate that notion. Amongst global respondents, 30% say they measure revenue per call.

Technology platforms, such as automatic call distribution (ACD) and interactive voice response (IVR) systems, can provide a wealth of data, according to Heinen. But a critical strategic element that focuses on the metrics that actually predict success is missing. “Call centers often treat ACD reports like an accounting system,” he says. “If they’re off by two calls, they spend time and effort trying to figure out why they’re off by two calls. However, the goal is to generate additional sales, drive down costs, build strong relationships or achieve whatever goal is vitally important.”

While customer satisfaction remains the most measured metric (70%), others measured are operational in nature: 68% measure call duration, 67% measure average speed to answer and 56% measure first call resolution rate, according to the Genesys report.

The measuring process does make a difference in the outcome, assuming the insurer continuously monitors the process and acts on its results. Making meaningful performance improvements will require a cultural transformation and a new measurement and analysis paradigm, according to Heinen. This means creating a more strategic focus of measuring what’s truly important—switching the call center’s mindset from meeting arbitrary efficiency metrics to maximizing the value of each interaction.

More powerful than written surveys, Heinen says, is the option given to customers of answering automated survey questions from an IVR system. Insurers can then use the data to act immediately by triggering actions designed to save potentially lost customers.

ONLINE ACTIVITY

While the call center is a significant customer service source, Web site activity is at an all-time high, especially in the auto insurance industry, according to the 2008 “Online Automobile Insurance Report,” from comScore Inc., a Reston, Va. In 2007, the online auto insurance industry achieved record levels of success. Consumers requested more than 32 million auto insurance quotes online and purchased more than 2 million policies using Web-based technology.

This represents a 15% annual growth in online quotes, and a 37% growth in online policy purchases.

With all of the online activity, it’s only natural to focus customer service measurement efforts there. Marj Hutchings, director of Internet operations at Esurance Inc., San Francisco, uses products from San Francisco-based Tealeaf Technology Inc. for these metrics. “We use Tealeaf to measure what the customer is seeing as far as page load times are concerned. So with Tealeaf, we are able to see some of our highest processing pages,” she says. “For example, when a page is calculating things in the background, sometimes it takes a little longer for that page to render. In our testing and on our production site, we use Tealeaf to benchmark the load times of those Web pages. It helps us make sure the customer is getting a consistent customer experience across the session, based on those benchmarks.” And if the page loads start to increase, Hutchings gets alerts and can then dig to see if there’s an actual site problem or if the problem exists elsewhere.

The product also helps Esurance’s call center. For example, someone calls into the call center with a problem on the site, the production support reps are able to, based on that customer session, see what error the person got and then search the Tealeaf canister for that error and quantify how many other customers are experiencing that problem. “If it’s maybe one or two people experiencing it, that’s going to be a much different priority than say 50 to 100 people,” Hutchings says. “It helps us understand how to prioritize Web site issues.”

“Tealeaf is very valuable for us in taking what is often reported as a vague issue by a customer, and enabling us to translate it to the specific issue,” says Lisa Ward, director of customer experience at Esurance. “For example, a customer’s view may be very broad and generalized, ‘The payment didn’t work.’ But, this gives us an area of the site to focus on and really dig in, then we can find the specific issue, which may only be tangentially related to payment. This gives us an area of the site from the customer’s perspective on which to focus.”

Another way Esurance measures customer activity is through pop-up surveys when someone is abandoning the Web site during the quoting process and usability testing. “Surveys measure why a customer is leaving the site,” Ward says. “We use this information to overcome obstacles, as well as design our e-mail campaigns.” The company also employs live usability testing on the Web site to gain information directly from users in real time. “We use this to prioritize Web site changes, and then validate how well they work.”

CLAIM RESPONSE ACTIVITY

Measuring customer service can be a tricky task, especially when the service is coming from a third party, as is the case with collision/repair shops. Allstate Insurance Co.’s Priority Repair Option program has approximately 4,400 participating auto/collision repair facilities around the country, and each uses AutocheX, a company of San Diego-based Mitchell International Inc., as their customer service indexing program. AutoChex interviews vehicle owners via phone and creates databases of customer opinion. In the Northbrook, Ill.-based insurer’s case, there are nine survey questions, responses and details for each collision/repair shop, and the results are then presented both to the shop and to Allstate. “We use that data in conjunction with the shops in a number of different ways to identify opportunity where we can improve our overall customer experience,” says David Perry, communication manager for Allstate’s Priority Repair Option program. “But we also use it to identify good things and we can share those positive results with our business partners and our employees.”

The repair facilities contract with AutocheX directly, but Allstate does have a say in some of the nine survey questions. Four of the nine survey questions are similar to other formats and other questionaires that can be compared from an industry standpoint. “So we may from time to time receive a report from AutocheX that gives us our results compared to the industry—other participating folks who are using AutocheX as their CSI indexing,” Perry says.

The data is available to Allstate in a few formats. The survey results are posted on a proprietary Web site owned by AutocheX, and it can be logged into by both the shops and by Allstate. Allstate’s front-line employees can look at either individual, claim-by-claim survey results and comments, or at month’s end they can toggle to a reports screen and see the aggregated results for that period. “Then, as the communications manager,” Perry says, “I also receive a spreadsheet of raw data for the results, which we use for trend analysis and reporting purposes in a database.”

The results are fed into an Allstate-built database, which currently provides detail down to the state level. “We’re able to do rolling months’ analysis, month-by-month trend analysis or we’re able to do multi-level analysis by attributing state-level results into our regions or territories. And since we have them defined geographically, we can monitor those results at whichever level,” Perry says. This means a front-line leader responsible for a couple of states could see his results or a marketing claims manager responsible for an entire territory might be able to see his for any one of the nine questions, Perry adds.

“We’ll use those results to look at the overall trends of a market and, often, we may visit a repair facility and simply discuss the challenges they’re facing,” Perry continues. “In a direct repair environment like this, when the customer asks for a recommendation, we provide it and they choose that shop. In many instances, that shop is the only face-to-face contact they have in that claims experience. They really do become an extension of the insurance company—our direct representative. So we’re very much engaged in helping them take advantage of the technology, understand the metrics and the surveys that are out there and listen closely to what the customers are telling them, because we have a vested, mutual interest in improving that experience of the customer. And, from a business standpoint, we’ve learned that what you measure soon improves.”

For more about customer service, search “Innovating Service with an Eye Toward the Future” at www.insurancenetworking.com.

(c) 2008 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

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