201305 - acord loma conference: e-insurance
DESCRIPTION
Presentation at 2013 ACORD LOMA Conference on moving insurance to a world of digital congress, from electronic apps to e-signatures, straight through processing, and image management. Presented in partnership with AXA Equitable's Nick IntrieriTRANSCRIPT
E:Insurance: Service In A Virtual World
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Welcome to Las Vegas!
Steven M. Callahan, CMC©
Practice Director The Nolan Companywww.renolan.com
[email protected]@StevenMCallahanwww.linkedin.com/in/stevencallahan
Nick Intrieri, PMPDirector – Strategic SolutionsAXA Equitable | Retirement Service Solutionswww.axa-equitable.comNicholas.intrieri@axa-equitable.com
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Session Presenters
Automating insurance processes driven by- Rapidly advancing technology- Accelerated consumer adoption
Integrated service experience solutions drive‐ Increased profitability‐ Improved customer satisfaction‐ Improved retention
Session Objectives:‐ Determining opportunities for achieving integrated service‐ Identifying key service delivery technologies and how they work together‐ Assessing service delivery deficiencies
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Session Overview
PC Claims Severity
Industry Faces Challenging Times
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Investments
RegulationMarket Exits
Technological Advances
Competition
Life Insurance Ownership
Demands on Service Amplified
More Diverse Consumers
Surge in New Service Mediums
Five Generations of Consumers, Large New Wave Coming(% of Total Population)
Greater Ethnic Diversity
The Digital Generations- powerful consumers
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And Diversity Drives Expectations
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10
20
30
40
50
60
70
80
Milli
ons
GI Swing Boomer Gen X Gen Y
High TechLow Tech
Increasing Customers Demands• Immediacy / 24x7 access• Transparency• Personal service relationships• Language differences• Benchmarks within and outside the industry
Agent > Mail > Phone > Fax > Email > Website > Chat > Social (FB, Twitter)
Service OperationsCompetitive Differentiation
Putting the Pressure On
New↑ & Old↓Technology
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Expanding Service M
ethods
With Less Room for Error
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Key sources of service frustration and probability of switching:
Best way to prevent switching?• First contact resolution 67%• Reward & recognition for doing more business 54%• Preferential treatment 44%
*Accenture 2012 Global Survey
62%64%65%
70%71%
73%77%
78%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Attempts to cross sell when calling for…Having to repeat same information over…
Long hold times when calling serviceStaff unable to answer question
Business policies that inhibit delivering…Multiple attempts to get problem resolved
Unfriendly or impolite service staffIncorrect product or service provided
“… 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, February 17, 2010
“Nationwide Insurance found that a 1% increase
in customer retention increased annual
premiums by $1 million”Insurance Tech. - CRM in Global Insurance,
Datamonitor, 2008.
“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, January 2008
Customer is a King with Great Power
Tens of thousands of positive service touchpoints a day, and yet one bad interaction…
And suddenly your company is at the top of the tweets list telling thousands followed quickly by a Facebook “Unlike” Fan Page.
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Before Social Media
Today’s Customer
Strong Service Delivers Revenue
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Strong Customer Experience Management =
Improved Revenue
Red = Lost Revenue / Customer TurnoverYellow = Incremental Revenue, Existing CustomersDark Blue = New Customer RevenueLight Blue = Net Change in Revenue
AverageBest-In-Class LaggardsNet Up $273M Net Up $84M Net Down $43M
And Companies Are Acting
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%
RespondentsArea of Focus
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Evolving the Service Delivery Model
One Size Fits All
§ Same service for all segments
§ Over invest in some, under invest in others
§ One model to manage
§ Differentiation created at company vs. segment levels
§ Easier to match capabilities
Evolving Model
§ Segmentation of needs and value
§ Service matched to segment needs
§ Appropriate service investment in each segment
§ More challenging model to manage but also …
§ Harder to replicate by the competition
Based on Differentiated Customers
PredictiveAnalysis
and Modeling
Low Medium HighPropensity to Convert
High value,Low
conversion, 2nd Priority
High value, Medium
conversion, Top Priority
High value, High
conversion, Top priority
Good value, Low
conversion, Low Priority
Good value, Medium
conversion, 2nd Priority
Good value, High
conversion, Top Priority
Low value, Low
conversion,Low Priority
Low value, Medium
conversion, Low Priority
Low value, High
conversion, 2nd Priority
Potential Value
Low
Med
ium
H
igh
Potential Future Value of Customer
Scoring of prospects based on conversion and value, marketing strategy developed to match
Survey Data
Web LogData
TextData
Purchased Data
Psycho-graphic Data
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At Acquisition and Retention
Match effort to risk/value
• Target high efforts on high value / high risk
• High value / low risk gets medium effort
• Low value = low cost efforts
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Using Life time Value
Time of Purchase Demographics -Loses predictive value over time as relevance is superseded by inforce behaviors
Customer behavior shifts focus from current to future value
Predictive Analysis
Current Value
Future Value
Post Purchase Activity –Increases in predictive value over time as behavioral patterns develop
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Leveraging Technology to Deliver
From:
To:Phone
Paper
Text
BYOD
Web
Service Delivery Process
Self-Service
ResolutionChat Video
Transfer Dialer
• Real time availability becomes key• Interactive online rules, forms and data neededNote: Social Media is a transport
Process = Requestà Process à Resolution
In Claims Too
FNOL EvaluateClaim
CloseClaim
Negotiate / Initiate ServicesPredict duration
Forecast loss reservesOptimize fast track claimsPrioritize resourcesFraudulent scoringLitigation propensity
Prioritized investigationFocus on organized fraudMinimize claim paddingReduce false positives
Identify salvage and subrogation opportunitiesIndicate deviations from similar claims
InitiateSettlement
SIU
Update Claim
Fraud Referrals Fraud Referrals
Re-estimate durationReassess loss reservingPrioritize resourcesFraudulent rescoringReview litigation propensity
Cross-sell options for satisfied customerCustomer retention program
Assign Claim
Fast Track Claim
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Top Targets in Play
§ Baseline requirement: Is Workflow in place?§ Acquisition:
– Sales support Expanding use of mobile devices– Electronic app Fairly straightforward, forms library– E-signature More complicated, issues addressed– Straight through processing Multiple solutions, fairly mature– Rules based underwriting Continuous advancements– E-delivery Multiple solutions, market issues
§ Management– Self service web portals Moderate advances– Interactive chat Available but not used– Mobile transactions Early on curve– Social media triggers Being defined, used for engagement
§ Delivery– FNOL submission Rapidly expanding– Automated Claims Review Starting up, analytics, webcams– In-process communications Fairly new, similar to management– Direct delivery of payment Mature
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Capability Maturity Approach
IdentifyCategorize RankRateEvaluatePrioritizeInitiateIntegrate
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Common Issues and Challenges
§ Piecemeal approach – missing integrated solution– May be multi-vendor, but still must integrate– End to end flow– Reusable solutions: e-Policy Delivery = e-Confirms = e-Statements
§ Misalignment of service strategy and corporate strategy– Customers being focused on?– High impact areas?– Competitive Differentiation
§ Focused on technology solution and ignore business process– Should be business led, technology enabled– Outside in view: Is it seamless? Does it flow without redundancy?
§ Lack of follow through– Reusability is key to fully deriving benefits and delivering service
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E-Insurance at AXA-Equitable
Expense Management
E-Insurance Strategies
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Background - Policyholder
E-Insurance Strategies
§ Life and Annuity carrier
§ Customer Snapshot: ~2.9M clients, $138B of in-force assets
§ Challenge: Increasing operating expenses and stagnant web utilization
§ eDelivery penetration low
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Self Service Tools
§ Online Account Access: Non financial transactions, account balance inquires, trades
§ eDelivery options: Statements, Prospectus, Annual Reports
§ Win/win for client and carrier?
§ In 2010: 24% Online Account Access; 5.1% eDelivery
Why is the adoption rate so low????
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Motivation and Awareness
§ Lengthy enrollment process
§ Previous marketing strategy inserts and envelopes
§ Client incentives unclear
§ Company incentives very clear (eDelivery):
$~$26M Company Wide Annual Print & Postage Spend
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Savings Breakdown
What is the best way to increase eDelivery?
Inforce Prospectus
Annual Report
Semi-Annual Report
Statements (4x)
Confirms (6x)
Marketing Budget
Service Center Budget
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Action Plan – Provide Incentive
§ Launched AXA Equitable eDelivery Sweepstakes in 2010
§ Emphasized “Go Green” Theme
1. Grand Prize – Hybrid Car (2011 Ford Fusion)
2. 154 First and Second Place Prizes
3. Contest Spanned from January – October 2010
4. Separate “Employee Sweepstakes” for AXA policy holders
5. Goal – Increase eDelivery rate by 3%
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Marketing Strategy
§ Stuffers in statements/confirms:
§ Email Campaign:
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Risks & Challenges
§ Compliance and Legal
§ Sweepstakes Administration
§ IT Implementation
§ Marketing Campaign (Email)
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Policyholder• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing techniques
Results
E-Delivery grand-prize winner John Holland with VP Accumulator Field Services Jim O'Boyle, VP, AXA Equitable and Larry George, Financial Professional, AXA Advisors. – Chattanooga Times
§ Increased eDelivery enrollment 161% from prior year
§ Company save ~$1M annually
§ Positive customer feedback
§ 2012 Sweepstakes yielded additional 50% enrollment increase
§ Currently at 11.5% eDelivery adoption rate
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Background – Advisor
E-Insurance Strategies
§ 50% of Variable Annuity business from Retail Sales Force (AXA Advisors)
§ 100% of applications submitted via Paper
§ Complex variable annuity products (SCS, Retirement Cornerstone)
§ NIGO Rate for AXA Advisors >50%
§ 3rd party electronic order entry (Aplifi, Ebix) 20% NIGO Rate
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Advisor• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of investment
Clear Opportunity – Annuity eApp
§ Eliminate multiple manual touch points that result in high NIGOs
§ Further AXA’s strategic goals of straight through processing and brand recognition
§ Position AXA as an industry leader in technological advancement
eApp + eSignature = Straight Through Processing
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Advisor• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of investment
Challenges
§ Vendor Selection Process
§ Integration of eSignature within eApp and downstream systems
§ Regulatory environment difficult to navigate
§ Budget and timeline to implement tight
§ Reaching aggressive adoption targets (50% Adoption Year End)
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Advisor• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of investment
System Design
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eApp in Action!
https://www.dropbox.com/s/pt61i61h4t4i7gx/Jim%20eApp%20video_11-06-Video%20Sharing%2C%20smallest%20file.mov
Link to video on eApp:
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Advisor• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of investment
Rollout Plan
§ Launched pilot in 3 branches Jan - March
§ Multiple WebEx Training Schedules for Admins, Advisors, and Branch Operations Managers
§ Comprehensive Communication Plan
1. Intranet/Email/Field Bulletin
2. Materials: Tutorial Video, User Manual, Quick Reference Cards
§ On site training and demos with big producers throughout 2013
§ Dedicated eApp support team (Phone & Email)
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Advisor• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of investment
Results
§ Positive feedback from AXA Advisors
1. iPad capability smooth and convenient
2. Electronic signatures flexible and intuitive
§ 5% adoption 1st month on track for 50% Year End
§ NIGO Rate reduced from 53% to 2% for eApp submissions
“It cut the entire process down a week. I don’t have to travel to get signatures or pay for overnighting paperwork. “
-Travis Penfield (AXA Advisors)
“Game changer”
“Can abandon trunk full of applications”
“As a new advisor and not being quite as familiar with all of the required forms, Annuity eAppwas a huge asset.”
-Kevin Kaplan (AXA Advisors)
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Background – Back Office
E-Insurance Strategies
§ 2011: AXA Equitable engaged Nolan to help streamline Document Management Center (DMC) Operations in order to:
§ Streamline DMC functions (Prep, Scan, Mail) across enterprise
§ Leverage Digital Content (Email)
§ Consolidation
§ *Optical Character Recognition
§ Construction of a Digital Mailroom: Big Opportunity
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Eliminate Waste
§ 2011 State Document Management:
Scan Verify
Open Sort Prep Scan Index DepositDeposit
§ Proposed “Optimal” State with OCR:
Open
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Vendor Selection
§ Key Decision Factors
§ Company
§ Solution/Technology
§ Implementation/Integration
§ Proposal/Price
§ AXA Germany Solution
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Insiders Technologies - smartFIX
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Project Plan – Phased Approach
§ Consolidation implemented prior to OCR
§ Staggered rollout enterprise wide
§ Business area ramp up at each site (New Business, Inforce, etc.)
§ Project completed in 18 months
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Challenges
§ Overlapping project resources
§ Integration with admin systems/workflow
§ Infrastructure (Fax Server)
§ Optimization Ramp Up
§ Change Management
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Back Office• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Results
§ Successful Implementation On Time & Budget
§ OCR Enterprise Support Team: Best Practice
§ Classification Rate: 55%; Straight Through Rate: 8%
§ 2013 Savings to be realized: $.75M/Annual
Still to come….
§ Optimization Ramp Up Savings: $1.8M/Annual
§ Classification Rate 85%; Straight Through Rate: 25%
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Digital Strategy at AXA Equitable
Expense Management
Customer Centricity
Digital Solutions
Policyholder
Advisor
Back Office
Questions?
Thank You For Your Time! Have a safe trip home.
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Steven M. Callahan, CMC©
The Nolan [email protected]
Nick Intrieri, PMPAXA Equitable | Retirement Service Solutionswww.axa-equitable.comNicholas.intrieri@axa-equitable.com