A cautionary tale of legacy technology or how to avoid a major meltdown in your organization

A cautionary tale of legacy technology or how to avoid a major meltdown in your organization

Were any of you flying Delta from April 5 to April 9?  If so, this story will be no surprise to you.  For the rest of you, you may remember it was spring break and terrible weather pounded Atlanta. The severe weather caused a five–day meltdown across Delta’s flight network and over 4,000 flights were cancelled. During those five days, Delta struggled mightily with two basic functions of its business – flying airplanes and accommodating passengers. The weather is, of course, out of Delta’s control, but the response and the ensuing chaos was amplified by something insurers understand all too well — the lack of modern technology. 

According to a Wall Street Journal article, the root of the problem was a telephone busy signal. An internal investigation found the biggest problem was that Delta’s 13,000 pilots and 20,000 flight attendants calling in for a new assignment couldn’t get through to the people in Atlanta who were rebuilding the airline schedule. Computers told gate agents rescheduled crews would be there, but the flights would end up canceled for lack of a crew member who was lost in Delta’s communication fiasco and unaware of the assignment.

I have to confess, my first thought when I read this article was to wonder how on earth a major company like Delta can be so lacking in modern technology. My next thought was wow, this is true for the insurance industry as well. While life insurance companies don’t have the challenges of rescheduling thousands of flights, a negative change in the stock market can create thousands of customer calls. And when a major catastrophe occurs, property casualty insurers can also be inundated by phone calls.

Delta’s response was to double the size of the crew-tracking team, dramatically increase the number of phone lines by June; and hope to have a system which will be able to send crews information about their trips electronically by August.

Rather than relying on hope, following are suggestions for insurers so that they can avoid the type of meltdown experienced by Delta:

  • Self-service portals or apps where customers can check their balances, make changes to their policies, and communicate with their insurer.
  • Chatbots that can provide answers to questions without human interaction.
  • Text messages to keep insureds informed.
  • Webchat to allow communication via the website.
  • Omni-channel support to allow seamless switching between devices.

We can’t control the weather or the stock market.  Unexpected events will happen.  But, how an insurer responds to them can have a significant impact on the customer experience and the customer long term relationship with the insurer.  In a hyper-competitive market, customer experience is a key differentiator.

If you are interested in building a better customer experience, here is a report you may find interesting, Standing Out in a Bland World: Global Life Insurance Customer Service Strategies.

Colleen Risk About Colleen Risk

Colleen Risk is a senior analyst in Celent’s Insurance practice. Her research focuses on life insurance business architecture, new business acquisition and underwriting, and large transformation program change management.

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