Presentation to insurance service leaders on service and contact center opportunities to provide competitive differentiation as well as summary results of a recent short survey on contact center challenges.

1. LOMA 2013
Policyowner Service Seminar and
Contact Center Workshop
Conference Survey & Current Topics
THE NOLAN COMPANY
Presented to:
September 10, 2013
Presented by:
Steven Callahan, CMC©
ChFC, CLU, FFSI, FLHC, FLMI/M, ACS
Practice Director

2. Introduction
The Nolan Company
• Management consulting firm celebrating 40th Anniversary serving Insurance,
Healthcare and Banking clients.
• Focus on solving complex operational and technical business challenges seeking
improvements in client competitiveness, effectiveness, and performance.
www.renolan.com
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Policyowner Service Seminar and Contact Center Workshop
www.linkedin.com/in/stevencallahan
September 10, 2013

3. Session Overview
Current Challenges
Survey Results
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Group Topics

4. Industry Faces Challenging Times
Investments
Life Insurance Ownership
Claims Severity
Regulation
Competition
Market Exits
Technological Advances
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Policyowner Service Seminar and Contact Center Workshop
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5. Demands on Service Amplified
More Diverse Consumers
Five Generations of Consumers, Large New Wave The Digital Generations
Coming
(% of Total Population)
- powerful consumers
Surge in New Service Mediums
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Policyowner Service Seminar and Contact Center Workshop
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Greater Ethnic Diversity

6. Diversity Adding To Expectations
80
70
60
M n
illio s
50
40
30
Increasing Customers Demands
• Immediacy / 24x7 access
• Transparency
• Personal service relationships
• Language differences
• Benchmarks within and outside the industry
20
10
0
GI
Swing
Boomer
Low Tech
Gen X
Gen Y
High Tech
Agent > Mail > Phone > Fax > Email > Website > Chat > Social (FB, Twitter)
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Policyowner Service Seminar and Contact Center Workshop
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7. Putting the Pressure On
New↑ & Old↓
Technology
Service Operations
Expanding
Service Methods
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Diverse ← &
Aging →Workforce

8. With Less Room for Error
Key sources of service frustration and probability of switching:
78%
Incorrect product or service provided
Unfriendly or impolite service staff
Multiple attempts to get problem resolved
Business policies that inhibit delivering…
Staff unable to answer question
Long hold times when calling service
Having to repeat same information over…
Attempts to cross sell when calling for…
0%
77%
73%
71%
70%
65%
64%
62%
10%
20%
30%
40%
50%
Best way to prevent switching?
• First contact resolution
• Reward & recognition for doing more business
• Preferential treatment
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Policyowner Service Seminar and Contact Center Workshop
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67%
54%
44%
60%
70%
80%

9. Today’s Customer has Great Power
Tens of thousands of positive service touchpoints
a day, and yet one bad interaction…
Before Social Media
“Reducing customer
attrition by 5-10% can
increase annual profits
by as much as 75%,
according to a study by
the Wharton School.“
Eight Strategies for First
Rate Customer Service,
Cisco Innovators
9
“… a modest increase in
customer experience will
increase customer loyalty
and boost revenues by
approximately $298
million for a $10 billion
insurance provider.“
Forrester Research
“Nationwide
Insurance found that a
1% increase in
customer retention
increased annual
premiums by $1
million”
Insurance Tech
Datamonitor
And suddenly your company
is at the top of the tweets
list telling thousands
followed quickly by a
Facebook “Unlike” Fan Page.
Policyowner Service Seminar and Contact Center Workshop
Today’s Customer
September 10, 2013

10. Yet Strong Service Delivers Revenue
Red = Lost Revenue / Customer Turnover
Yellow = Incremental Revenue, Existing Customers
Dark Blue = New Customer Revenue
Light Blue = Net Change in Revenue
Strong Customer
Experience Management =
Improved Revenue
Net Up $273M Net Up $84M Net Down $43M
Best-In-Class
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Average
Policyowner Service Seminar and Contact Center Workshop
Laggards
September 10, 2013

11. And Companies Are Acting
Area of Focus
Respondents
Expanding Accessibility
100%
Accelerating Service Delivery
96%
Increasing Hours and Days of Service Availability
82%
Creating Different Levels of Producer Service
82%
Consolidating Similar Functions Across Divisions
75%
Creating Different Levels of Customer Service
63%
Aligning Operations with Customer Markets
63%
Consolidation of Call Center Operations
57%
Aligning Operations with Distribution Channel
57%
Consolidating Physical Locations
50%
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Policyowner Service Seminar and Contact Center Workshop
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12. Evolving the Service Delivery Model
Evolving Model
One Size Fits All
§ Same service for all segments
§ Over invest in some, under
invest in others
§ Segmentation of needs and
value
§ Service matched to segment
needs
§ One model to manage
§ Differentiation created at
company vs. segment levels
§ Easier to match capabilities
§ Appropriate service investment
in each segment
§ More challenging model to
manage but also …
§ Harder to replicate by the
competition
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Policyowner Service Seminar and Contact Center Workshop
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13. Based on Differentiated Customers
Potential
Future
Value of
Customer
Survey
Data
Purchased
Data
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Policyowner Service Seminar and Contact Center Workshop
High
Predictive
Analysis
and
Modeling
High value,
Low
conversion,
2nd Priority
High value,
Medium
conversion,
Top Priority
High value,
High
conversion,
Top priority
Medium
Web
Log
Data
Potential Value
Good value, Good value,
Low
Medium
conversion, conversion,
Low Priority 2nd Priority
Good value,
High
conversion,
Top Priority
Low
Text
Data
Psychographic
Data
Scoring of prospects based on conversion and
value, marketing strategy developed to match
Low value,
Low value,
Low
Medium
conversion, conversion,
Low Priority Low Priority
Low value,
High
conversion,
2nd Priority
Low
Medium
High
Propensity to Convert
September 10, 2013
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14. Using Life time Value
Post Purchase
Future
Activity –
Increases in
Value
predictive value
over time as
behavioral
patterns
develop
Predictive
Analysis
Customer behavior
shifts focus from
current to future
value
Current
Time of Purchase
Value
Demographics Loses predictive
value over time
as relevance is
superseded by
inforce behaviors
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15. Leveraging Technology to Deliver
From:
Process = Requestà Process à Resolution
To:
Phone
Paper
Email
Text
BYOD
Web
Transfer
Dialer
Service Delivery Process
Chat
Video
Self-Service
• Real time availability becomes key
• Interactive online rules, forms and data needed
Note: Social Media is a transport
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Policyowner Service Seminar and Contact Center Workshop
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Resolution

16. With a New Service Paradigm
• “Customer Satisfaction Doesn’t Count”
The emotional connection payoff
…Through extensive research, Gallup has developed a measure
of customer engagement (CE11) that quantifies the strength and
nature of a customer’s emotional connection to a company.
Gallup’s 11-item metric assesses the critically important
emotional bonds of Confidence, Integrity, Pride, and Passion
that together reflect the true health of any company’s customer
relationships. The payoff is a far stronger link to business
results than any satisfaction measure can hope to provide.
…Gallup has found that without a strong emotional bond,
satisfaction is meaningless.
Gallup Management Journal, March 2003
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24. The One Change…..
New phone system and experienced people that can train on the reports that are produced and to help
trouble shoot problems with Call Monitoring & Witness.
Systems
Integrated and faster technology platform. Our CRM is slow and limited in functionality and we have
multiple legacy systems. CSR sit on the clock a lot.
Option of immediate feedback/survey provided by the customers at the end of a call
More advancement in social media within our company.
Better measurement of contacts per policy/agent so we could see who's calling a lot to try and
anticipate their issues and help prevent phone calls.
A comprehensive Customer Relationship Tool with extensive tracking capabilities
A more sophisticated phone software which would enable real-time reporting and monitoring.
social media and automatic processing
More effective management of the call. Setting better expectations for callers. Less dependency on the
back office.
Implementing a CRM
Hiring appropriate levels of staff for the Contact Center and for backingup the Contact Center
Knowledge distribution systems (on-line documentation, field-level helps, etc.)
Adding a Customer Service Center to allow them to handling simple changes. Adding a documentation
system to allows us to track all phone conversations. Building a survey for our customers so we know
how were doing.
Create 2 groups. One dedicated to the telephone calls and another dedicated to processing changes,
etc. Therefore, a better focus towards each tasks.
Separation of call center and processing center; however, our group is currently small
Improved systems (i.e. mainframe legacy system)
Having a console that worked with all of our admin systems to provide complete information to the reps
without having to utilize multiple systems. We need a more complete one-stop-shop.
Moving off of multiple claim systems onto one platform.
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25. Common Issues and Challenges
•
•
•
•
•
•
Misalignment of service strategy and corporate strategy
Focus on technology solution and ignore process
Customer service positions viewed as entry level
Customer service training often early casualty of budget cuts
Static solutions prevent dynamic changes
Failure to revise key metrics to reflect dynamic service environment
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