In business, we call them "drivers." However, the magnitude of life policy service pressures are so compelling that some insurers may feel more like they are in the shadow of a tremendous wave, with the potential of danger and risk. Some insurers will look at the wave optimistically, like surfers. They are ready to ride the wave, but they are worried about getting on the board quickly and at the right time while maintaining balance.
In most organizations it is the right time. Simplification and consolidation in policy servicing are no longer back office luxuries; they are needed to remain competitive and to effectively be client-focused. Many insurers are housing a disarray of systems and processes that lack cohesion, treading water with shaky wrappers, manual workarounds and external spreadsheets to maintain a proper level of service and IT knowledge base.
At the heart of all life policy servicing is the customer. If an organization can look at its customers on a micro scale (at each touch point) and on a macro scale (over their lifetimes), then the pieces of the policy servicing puzzle begin to fall into place.
The Micro View
According to her insurance company, Doris Watkins is three different people. Doris is a homeowner and working mother of three seeking simple income replacement and mortgage protection through term life death benefits. She is a mid-level executive with long-term disability coverage through her company's voluntary benefits program. She is 10-year spouse planning for retirement through an indexed annuity. At many insurers, anything as simple as an address change would require Doris or her agent to invest a morning's worth of work.
One of the promises of policy servicing transformation is the ability to capitalize on the "one customer, one view experience." This not only means the customer-centricity of the system, but also ties in actionable business processes with a configurable rules engine and automated tasks and alerts. With these, insurers can take policy servicing to the next level and not look back.
[Previously from Stockwell: Life/Annuity Insurers on the Technology Modernization Sidelines]
The Macro View
What happens during one transaction or touch point with Doris? Does she feel like her insurer "knows" her or does she feel like a policy number? A policy servicing transformation can grow her loyalty and make her feel "taken care of." Each service touch point is crucial to keeping clients happy, understanding their stages of life needs and growing their level of engagement. While Doris is one customer today, she can easily add the value of several more customers over her lifetime. She may convert her term policy to universal life to add to retirement savings. She might look to a variable payout annuity to keep a paycheck after retirement. She may look to protect her assets and independence with Long-Term Care insurance during her golden years. Modernization helps to capture the opportunities. A system with a usable approach to data management and high capacity for data capture will enable sales and marketing through every channel at every stage of life.
At the Agency Level
For the next few years, agents and insurers will be redefining their relationship and coming to terms with a new model of the customer experience. When agents identify an insurance organization as a technologically-adept enabler, they drive business in that insurer's direction. But policy servicing is not just about finding Doris' data when she calls, it's about understanding blocks of business, being able to easily fill a pool of likely prospects for new products and grasping trends – putting more tools in the Agent toolbox.
At the Home Office
Marketing and customer service are trying to figure out how to serve Doris better and potentially capitalize on their relationship. They are also looking to understand groups of policies from all angles. Where are the trends? What are the opportunities? When policy data is handled properly, its ability to indicate productive information is greatly enhanced. Modern policy servicing adapts the roles of business users and IT to gain efficiencies. Instead of "Can you build and run a report for us?," the business teams are asking IT, "How can we use our relevant data to create a more personalized experience and how can we better mine the data for more proactive servicing?"
Efficiencies + Opportunities = Profitability
Riding the transformation wave is more about balance than ever before. More self-service options will not replace the need for person-to-person service. New technology should foster the optimum service mix that improves organizational efficiencies while enhancing personal access. Agile systems with real-time data, greater transparency, and "one view" of the customer will upgrade service and communication.
Capturing the transformational wave is also about turning modernization opportunities into profits. It's a challenge that won't be conquered overnight, but understanding current servicing capabilities in light of potential capabilities will open up the windows of opportunity and lead to long-term profit. Organizations on the board now will ride the wave to their competitive advantage.
About the Author: Erik Stockwell is senior vice president and head of MajescoMastek's Life/Annuity Insurance Division.