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Baltimore Life's Compliance Organization Shows the Value of Innovation

Baltimore Life turns a system that was designed to interpret regulations into a survey machine that helps improve customer service.

The Baltimore Life Insurance Company ($940 million in assets) isn't the biggest life insurer in the country, but that doesn't mean its market pressures are any different than those faced by the largest carriers, says Harold Rojas, the Owings Hills, Md.-based life insurer's SVP, general counsel and secretary. As a result, he adds, "For our company, there's been this push to understand our consumers better."

At first glance, this might not seem like a concern for the compliance department. But within Baltimore Life's organization, compliance and transparency are big parts of the value proposition, Rojas explains. "Baltimore Life prides itself on being what we would consider a compliant company," he says. "We don't do just what's required, but what's in the best interest of the consumer."

According to Rojas, Baltimore Life began looking in late 2011 for a more efficient way to distribute and analyze market conduct surveys, which serve an important function for the company, as they help the carrier keep tabs on how its products are being represented in the marketplace. "It's a way for us to measure how our agents are selling our product," Rojas says. "It's also a way to make sure that customers are getting a product that meets their needs. This suitability concept is one that's come up in the past couple of years, and there's new regulations in every state about it."

The core function of Baltimore Life's compliance platform, CODE from Pittsburgh-based Compliance Assurance Corp., is to boil down new regulations into easily digestible summaries, which the insurer can then email across the country to its network of independent agents. It was this publishing capability, called Compliance Portal, in which Baltimore Life saw an opportunity to streamline the customer surveys, Rojas reports.

Driving Customer-Focused Innovation

Compliance Portal is designed to provide an avenue for agents and producers to meet compliance requirements within the platform, Rojas says. Emails containing a username and password are sent to agents who have duties pending. To streamline the survey process, Baltimore Life configured Compliance Portal to email survey links to the company's policyholders, who could complete the suitability survey within the portal. This customer-focused use of the system is an innovative adaptation of the system, acknowledges Compliance Assurance Corp. CEO Jerry Shafran.

"Our platform always had a component to go out of the four walls and publish, but we did not anticipate them doing that to the insureds," Shafran admits. "Most people look at compliance as a business disabler — the people that say 'no.' But in Baltimore Life's organization, compliance is taking an innovative approach that is solving a problem that makes sales happy."

The sales team benefits from an inside view of the distribution practices, but the entire organization benefits from leveraging an existing technology platform and the resulting cost savings, Baltimore Life's Rojas notes. "A lot of companies pay LIMRA or another organization to mail out these surveys on their behalf, but you lose that direct contact with the customer and pay for postage," he says. "Plus, it's almost like it's their customer. This is a Baltimore Life-branded engine that looks like it's ours. It says a better message than 'Here's another SurveyMonkey' — we felt we'd get responses back more quickly and more accurately."

[Editor's note: According to LIMRA, however: "LIMRA's Customer Assurance Program (CAP) has been a leader in this market for more than 15 years, currently serving 70 corporations representing 97 companies. Since this inception of the program we have communicated with more than 33 million customers on behalf of our members.

"CAP is a time-tested and proven direct-mail system, which has a response rate much higher than an online program. All of the surveys mailed are company branded (envelope, letterhead, etc.) and include a letter from the president of the company encouraging the recent customer to respond. Because we are an independent, third-party research association and the trusted source of industry knowledge, customers feel more comfortable providing forthright and honest feedback. CAP has the ability to provide data from other companies to allow our member to benchmark their results. It provides our members with the knowledge to allow them to improve the quality and service of their producers; address customer concerns; recognize their most effective producers; and improve their product design and supporting educational materials to ensure customer understanding."]

For Baltimore Life, the entire initiative represents the shift Rojas described to a customer-centric culture. The company historically had seen its customers as the independent agents, and left the agents largely to their own devices when it came to sales practices, he relates. Now, however, the insurer sees it as its responsibility to make sure its products are being represented in the best way possible.

"It used to be the independent agent's burden to ensure that the product is suitable for a customer. Now it's sliding the other way — the company has to make sure that the agent is only making appropriate sales," Rojas says. "Some of our survey responses have brought our attention to an agent sales practice that's less than ideal. We've been able to reach out and say, 'Here's the behavior — here's how you can change it.'"

[For more on How to Build a Modern Claims Experience, see related story.]

CASE STUDY SNAPSHOT

Company: The Baltimore Life Insurance Company (Owings Mills, Md., $940 million in assets).
Lines of Business: Whole and universal life and fixed annuity.
Vendor/Technology: Pittsburgh-based Compliance Assurance Corp.’s CODE compliance platform.
Challenge: Streamline the distribution and analysis of market conduct surveys to gain insight into independent sales force.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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