Author: companymanstudios

Joseph Richard Serrano

By Joseph Richard Serrano
President, CX Insurance Services

Domino Effect: Claims Experience → Net Promoter Score → Profitability

Not surprisingly, Bain & Company continues to produce hard data linking the criticality of Claims Experience, Net Promoter Score, and Insurer Profitability. Consider the following:

1. Claims interactions, though infrequent, have the greatest effect on loyalty (Net Promoter Score)

Net Promoter Score

Bain & Company Research, 2014

2. Policyholders with a strong Net Promoter Score stay longer, buy more, and provide more referrals

Net Promoter Score

Bain & Company Research, 2014

At CXIS, we’ve developed a Program specifically for P&C Carriers to:

  1. Aggregate claims experience data, including Net Promoter Score
  2. Provide analytics around claims experience, NPS, and growth/profitability
  3. Facilitate a continuous improvement program – i.e. actually use the data

100% of our associates are insurance-certified (The Institutes), and we’re a Net Promoter Score certified company. Give us a shout; we can help.

Joseph Richard Serrano

By Joseph Richard Serrano
President, CX Insurance Services

Not all Hugs n’ High Fives

Corporate stock photos be damned; Customer Experience isn’t all hugs n’ high-fives.  For P&C insurers, there absolutely is an ROI for Agent & Policyholder Experience.  Consider the following:

Revenue Uplift

A $1 billion insurer stands to generate an average of $370 million additional premium over three years with a modest improvement in customer experience.
– Source:  The Tempkin Group

Retention

Nearly 2 out of 3 policyholders are at risk of non-renewal with only a neutral and/or negative customer experience.

– Source:  J.D. Power

Profitability & Growth

The close link between customer loyalty and profitability is widely acknowledged and accepted. Loyal customers devote more resources to their insurer, stay longer with that insurer, and are more likely to recommend it to family and friends. All of these factors, in turn, lead to increased profitability for the company.
– Source:  Cap Gemini

Stock Performance

A Forrester Research index of customer experience-leading companies has posted an average ten year stock return of 213% vs. the S&P 500 average of 75% from July 2004 – July 2014.
– Source:  Forrester Research

At CXIS, we’ve developed a Program for Quantitative Agent & Policyholder Experience that is designed to blend into a P&C carrier operation:

  • Continuous & real-time aggregation of agent & policyholder experience, operational, & social media data.
  • Modeling & analytics to identify impacts on policy growth, retention, net promoter score, conversion ratios, quote volumes, etc.
  • Facilitation of a Continuous Improvement Program – i.e. actually using the data; operationalized by insurance executives.

So is Customer Experience all “fluff”?  Ask companies like USAA, Southwest, & Amazon.  Or just ask us, because we actually know insurance too… info@cxiservices.com.

Joseph Richard Serrano

By Joseph Richard Serrano
President, CX Insurance Services

The Next Battleground for Differentiation

The Insurance Industry – particularly P&C – harbors complexity not found in most others. Fragmented distribution models, supply chain hand-offs, and pervasive regulatory requirements collectively create a challenging environment for Agent & Policyholder experience. As product and price competition grow increasingly difficult for insurance companies, customer experience is becoming the next battleground for differentiation.

Some food for thought…

  • Nearly 2 out of 3 policyholders are at risk of non-renewal with only a neutral and/or negative customer experience
  • Among least satisfied policyholders, only 39% indicate they’re likely to renew and only 44% say they’re likely to recommend their insurer
  • Among highly satisfied policyholders, 86% say they “definitely will” or “probably will” renew their policy, while 96% say they “definitely will” or “probably will” recommend their insurer

Source: J.D. Power

Except for pieces of paper (for those who still want them), insurance companies don’t sell something people can touch, feel, or hold. They sell a promise. Because of this – and because technology continues to empower consumers with choice, convenience, and speed – customer experience has become table stakes for today’s insurance organizations.

Unfortunately, most don’t have the expertise or time to quantitatively measure their Agent & Policyholder experience – nor manage it as a continuous improvement program. They’re certainly not getting this from their BPO vendors.

Fluff? Not likely. A Forrester Research index of customer experience-leading companies has posted an average ten year stock return of 213% vs. the S&P 500 average of 75% from July 2004 – July 2014 (Source: Forrester Research). It’s not hard to envision the financial impacts of a strong customer experience when considering those that got it right: USAA, Southwest, Amazon, and so on. Although as a whole we’re playing catch-up, some in our industry are getting it right too. These and other P&C organizations that prioritize customer experience as a C-Level initiative will win the next battleground for differentiation.

Joseph Richard Serrano

By Joseph Richard Serrano
President, CX Insurance Services

We Employ U.S. Veterans – You Should Too!

Under the category of “unsolicited advice”, here’s a tip free-of-charge: Hiring U.S. Veterans makes good business sense. Here’s why:

1.) Old-fashioned Respect: Unfortunately, basic manners and common courtesy seem to be fading as a lost art. Military personnel are trained to respect their superiors and civilian leaders – the same training can be applied to their customers. Sometimes, the simple act of courtesy & making the extra effort can go a long way for a superior customer experience.

2.) Problem Solving: Are critical thinking skills and thinking-on-your-feet important to your business? They are to ours. Ask a Veteran about this – some piece of mission essential information or equipment almost always is missing or breaking down right when they need it. Murphy’s Law and Soldiers are old acquaintances. From this adage evolves a honed skill for creative problem solving on-the-fly. Civilian softies like me call this “thinking outside the box”.

3.) Attention to Detail: My father preached it incessantly: “Always do things to the best of your ability.” Even for tasks I considered menial – making the bed, folding towels, etc. Years later I’ve grown to appreciate the wisdom of his approach. Attention to detail, work ethic, and discipline – they’re all habits. Success is a habit. It was all training he received in the military.

4.) Punctuality: There’s a saying in the military: “If you’re 15 minutes early you’re on time, if you’re on time you’re late, and if you’re late you’re screwed.” Service Members learn to plan ahead. It sounds tactical – but again, details matter.

5.) Skills: Army, Navy, Air Force, Marines, Coast Guard, Merchant Marines, you name it – they all deliver regimented training programs spanning technology, strategy, and leadership. For our business – technology, in particular, continues to empower today’s consumers with choice, convenience, and speed. The ability to apply technology comfortably and efficiently in solving customer problems is foundational to delivering a superior experience.

Many Veterans have demonstrated an ability to deliver under pressures most of us won’t have to know because of their service. Sometimes, the best advice is free.

Joseph Richard Serrano

By Joseph Richard Serrano
President, CX Insurance Services

A Best-Kept Secret, Perhaps Kept a Little TOO Well

There seem to be three “common truths” amongst those of us in the insurance industry:

  • Everyone gets into the insurance business “by accident”
  • For a huge industry, it’s an amazingly small world
  • Insurance is the best-kept secret in Financial Services: nice salaries, relatively sane work/life balance, but without the curb appeal of some of those banking gigs

With regards to this last point – given the alarming talent shortage that is growing across the P&C industry, I wonder if this has been a best-kept secret perhaps kept a little too well. Securing talent with the insurance expertise needed to “run the shop” is becoming an increasingly challenging proposition for today’s Carriers, MGAs and Program Administrators.

Some eye-opening data:

  • The average age of an insurance industry professional is 54
  • 60% of insurance industry professionals are older than 45
  • 70% of claims adjusters are older than 40

Source: Deloitte Research

This problem is growing worse on account of two trends: the retirement of Baby Boomers, and a growing skills gap. Over time, hopefully we’re able to transform a common perception of the insurance industry as outdated and stodgy amongst young job seekers. But in the meantime, insurance companies must think about the problem differently.

The global insurance BPO market has grown to US $2 billion, and continues to expand at 17% year-over-year growth (Source: Everett Research). However, BPO models are transforming from pure cost-saving “lift & shift” maneuvers to more strategic in nature – for both full enterprise operations and more surgical, function-specific approaches. Quality control and communication concerns with off-shore outsourcing are consequently driving demand for on-shore BPO partners. Those U.S. based BPO organizations that are able to package meaningful value-add services alongside traditional business processing will continue to differentiate across insurance companies as the talent gap widens.