The first step of customer experience transformation

The first step of customer experience transformation
The easiest way to grow your book of business is to keep your customers happy. Retention goes up, cross sell goes up, and you will get referrals. This isn’t a big revelation. Carriers know this. The key to keeping customers happy is to create a top-notch customer experience. But insurance is complex. Consumers have a greater number of choices today than ever before and consumers are accessing carriers through more channels than were ever available in the past. This complicates the picture at the same time that expectations are increasing. Customers expect that the carrier knows the details of every prior interaction they have had. That is hard to do when customer data is fragmented across multiple systems. Customer experience includes many facets – advertising, the acquisition process, claims and of course, the quality of customer care. Carriers are looking for tools to help them provide a superior customer experience regardless of the channel the customer chooses to use at the time. That is probably why we are seeing a huge increase in the interest in Customer Relationship Management tools especially by small and midsize carriers who haven’t invested in this type of software before. Customer relationship management systems are one of the components in many insurers’ application maps. Although CRM solutions are not unique to the insurance industry like policy administration or claims systems, they are still key technologies used to manage relationships with customers, whether customers are defined as agents/distributors, claimants, end policyholders, or prospects. There are literally hundreds of CRM solutions available today from firms large and small, well-known and obscure. I’ve just published a report focused on enterprise solutions for larger-scale organizations similar to most US insurance firms. The report does not include CRM solutions that are appropriate for small organizations such as independent agencies or advisors. It also does not address horizontal solutions that are not specifically targeting the insurance industry with tailored capabilities. There are a wide range of CRM solutions on the market for insurers to choose from. A wide range of features and functionality are available. These systems are used in various capabilities within insurance carriers — from producer management, to call center support, to managing leads and campaigns. Integration with other systems will be needed to provide the most value to a carrier. There is no single best CRM solution for all insurers. There are a number of good choices for an insurer with almost any set of requirements. The right solution for a carrier depends on how the carrier plans to use the solution. Some carriers use CRM solutions as a front end to all the core applications. It is the entry point for a call center representative to access all data for those who are calling. Other carriers use CRM solutions to manage interactions with the distribution channel. Still others use it primarily to manage outbound marketing campaigns and may extend this capability to the external distributors. System selection also may be driven by how the carrier defines “customer.” Some carriers define the customer as their agency or broker-dealer firms. Others define the customer as the final purchasers of the insurance policies and annuities. Some solutions may be better at handling some business models than others (e.g., 20 million end user clients vs. 200 agencies), though most would claim to be able to handle all levels of “customers.” Therefore, the ability to build and maintain appropriate hierarchies (agency or broker-dealer, agent or advisor, household or individual) within CRM solutions is an important aspect to examine. An insurer seeking a new CRM solution should begin the process by looking inward. Every insurer has its own unique mix of distribution channels, geography, staff capabilities, business objectives, and financial resources. This unique combination, along with the organization’s risk appetite, will influence the list of vendors for consideration. Some vendors are a better fit for an insurance company with a large IT group that is deeply proficient with the most modern platforms and tools. Other vendors are a better fit for an insurance company that has a small IT group and wants a vendor to take a leading role in maintaining and supporting its applications. We recommend that insurers that are looking for a CRM system create narrow their choices by focusing on four areas:
  • The functionality needed and available out of the box for the way the carrier plans to use the system and the customer types desired. Check to see what is actually in production.
  • The technology — both the overall architecture and the configuration tools and environment.
  • The vendor stability, knowledge, and investment in the solution.
  • Implementation and support capabilities and experience.

Living with the Internet of Things (and crowd funding)

Living with the Internet of Things (and crowd funding)
Earlier this week some users of the Wink smart home hub found that their smart home hub was more useful as a door stop or brick than as a hub. A fix is being worked on and rolled out to customers but for me this looks like the teething problems of the still nascent Internet of Things movement and one of the hurdles Apple is trying to jump with the Apple Watch. Earlier this month I received a portable handheld scanner from Dacuda. It’s not unusual for me to receive gadgets in the post but this one was particularly interesting to me as I had been one of the kickstarter funders of the item and have been following it’s creation with some interest. It piqued my interest particularly because I’d seen the technology almost two decades ago in a research lab but not seen it come to market at a reasonable price – a scanner that one moves over the page and software builds a picture of the underlying document. This isn’t the first item funded via crowd funding I’ve bought. My keys have a tile attached to them and I’m still wearing the original Pebble wrist watch (with e-ink display). I guess this firmly places me as an early adopter in the Internet of Things, wearables and crowdfunding space. I don’t have a Wink hub although it’s sort of appealing but not available in the UK yet. So far though it hasn’t been all clear pastures and dreams ideally realised. The Internet of Things has it’s teething problems. Let’s take the Tile for instance, a small device that emits a bluetooth and short rage wifi signal so you can track it’s location from a phone or tablet, thus, never losing it. I used to have 3 of them and now have 2, that’s right I lost one. I was rushing out the door, the school run running a little behind schedule and forgot my phone. Somewhere on the brief journey I dropped the Tile and what it was attached to. Had I had my phone with me it would have given me the location of the last place it connected to the Tile, as it was it told me the last time it saw the Tile was at home. No matter, in theory if I retrace my steps I will come in range and be alerted that it is found. This didn’t work either so I assume it was picked up. Since the battery lasts two years perhaps someone with the app will go near it and it may yet find it’s way home – but not yet. Part user error and part an unfortunate series of events perhaps, but another technology found fallible and a dream not quite realised. The Pebble has been more successful. The fact I answer the phone when it rings is largely down to my smart watch rather than the phone these days and the wrist-borne notifications are hugely helpful. I use the misfit app on it to tell me I’m not doing enough exercise and a Withings smart body analyser at home to let me know the end result of not having done enough exercise – all great fun! I may still invest in the Apple Watch. I have a standing desk so do stand, something misfit on my pebble doesn’t track and I feel I want to be recognised digitally for this at least. The little handheld scanner is more work in progress. My son’s somewhat fascinated when it works and hugely interested in the errors it makes and where they are made – such is life as an early adopter. More teething issues there. No doubt though we as a population are moving to a world where anything we buy could be connected, where we can buy a $50 hub that controls our lighting from an app and it’s failure is covered in the global (technology) press and where we can fund and follow the development of gadgets we’ve dreamt of owning for a couple of decades (even if the software needs a little more work). So what does this have to do with insurance? The fact is the Internet of Things appears to be running apace, smart homes are being tried out by the early adopters and bugs are being squashed. Did you know with the Wink hub, the app on your phone and this $40 quirky+ge water sensor you can get alerted in real time regarding escape of water events? Ever been out of the house and come home to find the kitchen, bathroom or basement flooded? Indeed just yesterday Karen pointed out this article suggesting insurers are getting involved with smart homes. There’s a lot of buzz around health and life insurance in part driven by the Apple Watch launch. I’m looking forward to Apple doubling down on the HomeKit API or someone credible getting there first; I’m looking forward to the same boom around the Internet of Things and insurers handing out moisture sensors to home owners. I’m looking forward to prevention and intervention products, rather than selling services after a loss. Perhaps we just need to squash a few more bugs first.

For Halloween: The Tricks to Get Innovation Treats

For Halloween: The Tricks to Get Innovation Treats
Innovation is not witchcraft but, when done successfully, there is a touch of magic. The magic happens when innovation becomes “part of the way we do things around here” (read: corporate culture). When people across the firm approach their jobs constantly through the lens of “how do I change my job so that I deliver more value to my customers?”, magic can happen. We discussed this in a webinar this week (Innovation in Insurance: Differences across Continents). The point was made that there are specific actions (tricks!) that prepare a corporate environment for magic. Specifically:
  • Establish a common language around innovation; what is it? what is it not?
  • Revise reward systems, especially around encouraging “fail fast” behaviors
  • Develop a communication plan around innovation – leverage Corporate Communication expertise to sustain a messaging effort around innovation
  • Tune existing governance structures to handle innovation initiatives differently than run-the-business projects
The message coming through in Celent research is that innovation is more process, sweat, and political capital than black art. So, try these tricks in your organization so that you (and your customers and teammates) can enjoy some innovation treats!

Innovation that Delivers on the Brand Promise at USAA

Innovation that Delivers on the Brand Promise at USAA
The announcement today (http://www-03.ibm.com/press/us/en/pressrelease/44431.wss ) of the use of IBM’s Watson platform by USAA demonstrates several of the current research themes at Celent. The move is an excellent case of innovation at the intersection of brand, risk management and technology. First and foremost, this is another example where USAA is delivering on its brand promise – to improve the lives of active duty and veteran military members and their families. The company will use Watson will to answer the questions of service military members who are transitioning to civilian life. An firm’s brand promise is at the foundation of the Celent customer experience model. It is the key characteristic that signals the evolution from a customer relationship management (CRM) to an experience approach. Second, this development is an illustration of an increased focus on prevention and risk mitigation. Traditionally, insurance has been a backward-looking, financial indemnification product (we pay you when there is a loss). This approach shows how insurers will innovate to apply technology to help insureds more effectively manage the risk in their lives (reduce or, avoid risk, altogether). This redirection will occur in commercial, as well as personal lines (see previous post on this blog: “My Risk Manager is an Avatar”). Finally, this is a business application of a computing approach that, up to now, has been closely held in the laboratory, in select pilot accounts, and in a custom, controlled environment (such as Jeopardy!). It will be fascinating to see what we humans, and the machine, Watson, learn in from this insurance debut.

Are insurers ready for the milenial and Z generation? A Latin American perspective.

Are insurers ready for the milenial and Z generation? A Latin American perspective.
At corporate level we usually conceive and refer to technology focused on the internal use and how to reach to the outside world to provide better products, have more efficient value chains and improve service.  For example insurance portals or technologies that will improve call center performance. This conception has been very useful to the insurance industry enabling evolution and innovation. Let’s take the UK insurance market for example. The auto industry started mainly as broker based but then evolved into direct insurance. It got somehow more sophisticated with the segmentation of net-worth customers. In this sense, the use of technology has been usually seen as a support to the business, but more and more it is becoming a central part of the business model for many insurers, especially for those new and disruptive players. Following the UK example, the use of telematics and “pay as you drive” and “pay how you drive” type of insurance products has lately enabled disruptive models that also integrate internet, mobile and social media to deliver products and services. These insurers recognize the fact that consumers have incorporated technology into their daily lives and that they expect from insurers the same level of engagement and user experience they have with other players in other industries such as Apple and Amazon just to mention two. Computers are everywhere, in the office, at home, in our appliances, and electronic devices; even phones are now computers, and consumers are using them to interact with people and companies by web access, e-mail or social media. Mobility is a fact that insurers need to recognize as they deploy new technology driven strategies. A usual misconception is that emerging markets are behind most mature markets in terms of internet, social media and mobile usage. You might be surprised to know that Latin America for example:
  • Had 231M internet users in December 2011 (10% of the world internet population);
  • Had 145M Facebook users in April 2012 (18% of worldwide Facebook users), and
  • Had +500M mobile connections as from March 2010 (86% of the Latin American population)
As for smartphones, clearly of more interest for deploying self service capabilities for agents and upper income consumers:
  • Brazil has more smartphone users than France or Germany
  • Brazil and Mexico together have more smartphone users than Australia has inhabitants
  • Argentina smartphone penetration (24%) is better than in Germany
Latin American countries also present above-average usage patterns in many areas:
  • 65% of Mexican smartphone users search on their phones every day, compared to 57% in the U.S.
  • 90% of Argentine smartphone users use their phones to access social networks, compared to 63% in Japan
  • 29% of Brazilian smartphone users have changed their minds about a purchase while in a store due to research conducted on their phone, compared to 15% in Canada
Mobile is changing the way Latin American consumers interact with the world…
  • 57% of Brazilian smartphone users read newspapers or magazines on their phones
  • 73% of Argentine smartphone users check email on their phones every day
  • 81% of Mexican smartphone users watch video on their phones
 …Especially when it comes to shopping
  • 26% of Mexican smartphone users have made a purchase on their mobile
  • 45% Brazilian smartphone users have purchased on their computer after researching on their mobile
  • 82% of Argentinean smartphone users have researched a product/service on their mobile
Usage data and user behavior is indicating that engaging with consumers and stakeholders through the use of internet, mobile and social media makes sense. Though, our research shows that the priorities and investments by Latin American insurers in these areas are very low. There might be some isolated efforts, but no integral approach to embrace these technologies to provide an improved customer experience which could result in growth, retention and efficiency. This seems to be the time to start acting, unless the insurance industry in the region wants to wait and see if a disruptive outsider sets the new standard. Worth the risk?

Why Billing Matters

Why Billing Matters

I have a homeowners policy with the DoNotDisclose Insurance Company. DoNotDisclose is a large, primarily personal lines company.

 

My policy term ends on Oct 8 every year.  This past August, I received the dec page and invoice for the new year, and paid it in full online.  I mean, I thought I paid it in full. Today I discovered that whatever I did, did not result in a payment being made.

 

I’ve been away from home for a few days. Opening my mail today (October 21) I had a letter from DoNotDisclose telling me that my homeowners policy expired on October 8 due to non-payment of premium.  The letter was post-marked October 16.  Between my initial invoice in August and my Expiration Notice, I had received the following communications from DoNotDisclose: zilch, nada, and rien,

 

Looking at the letter telling me my largest single investment had been uninsured for the past two weeks literally made me queasy.

 

Does anyone know a good personal lines company that understands the relationship among billing technology, billing processes, communication, and customer experience?

Customers are the Disruptive Force in Insurance

Customers are the Disruptive Force in Insurance
Insurance has traditionally been known as a risk-adverse industry and thus the last to employ new technologies. This characteristic is more a comment on the old culture and way of doing business than really being risk adverse. Customers are now forcing insurers to deal with a change at a rate that is faster than they are comfortable. Customers have become a disruptive force in insurance. When I was in the enterprise architecture team in a large insurer, the business drivers always included lower TCO (with respect to IT), improved ease of doing business and business agility. However, ease of doing business was primarily focused on Independent agents, CSRs and underwriters. The actual policy holder was an afterthought to the policy process. Insurers created better UIs and in some cases enterprise portals to allow their agents, CSRs and underwriters easier access to their systems and better collaboration between these groups. While the policy holder was important, the agent was the insurance customer and the policy holder was the customer of the agent. Then insurers opened up Pandora’s Box and enabled policy holders direct access to submissions, claims and more recently self-service. The problem is that their systems were not designed for policyholder access. In addition, these customers have a level of expectations that most insurers are not ready for. Almost overnight, insurers realized that they had entered a world where the company no longer “owned their brand”, they could only manage it. Customers own the brand. Two examples show this change very dramatically. First is the well-known United Breaks Guitars YouTube incident . A customer, Dave Carroll, saw United baggage handlers damage his guitar and when he could not get satisfaction, create a creative YouTube video for the world to see. It went viral in a matter of days and by the time United was ready to fix the problem, the horse had escaped the barn. United now uses the video for training purposes. United learned the customer owned the brand the hard way and now they work hard to manage it. A friend recently told me of a Moen faucet that they had bought. They didn’t get around to actually installing it until months later and it did not work. When he called, he was told that the warranty had expired and there was nothing that they could do. He tweeted his experience and within 10 minutes, received a tweet from Moen asking him to call them to allow them to fix the problem. Within hours, a service rep was at his door with a new faucet and installed quickly. All Moen asked is that he tweet his satisfaction about the fix which he was happy to do. Moen obviously was monitoring the social network and acted quickly to manage their brand. While neither of these experiences have anything to do with insurance, they show the power of the customer. The same customer that now has and is demanding the same level of service they get from other industries. They could care less about legacy systems. They could care less about integration issues and complex environments and systems. They know what they get from other places they purchase items and expect nothing less from insurance. CIOs now state that customer experience trumps features and functions when selecting vendor systems. They are willing to go with 80% of their desired features and functions if the vendor can deliver an excellent customer experience. These statements come from two CIO panels I have recently viewed, one in insurance and one outside of insurance. The customer is turning the insurance business model on its ear. While agents, CSRs and underwriters have put up with the old status quo with small improvements, insurers that do not quickly adapt will become extinct. It has been said, the problem with insurance is dinosaurs lay dinosaur eggs. The customer ice age hit quickly. Which insurers will evolve at this new break-neck pace being demanded by the true customers and which will slowly die off?