201305 - ACORD LOMA Conference: e-Insurance

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

www.renolan.com

mailto:[email protected]

www.linkedin.com/in/stevencallahan

www.axa-equitable.com


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


Good value, High

conversion, Top Priority

Low value, Low

conversion,Low Priority

Low value, Medium

conversion, Low Priority

Low value, High


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

Email

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


§ 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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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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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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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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Marketing Strategy

§ Stuffers in statements/confirms:

§ Email Campaign:

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Risks & Challenges

§ Compliance and Legal

§ Sweepstakes Administration

§ IT Implementation

§ Marketing Campaign (Email)

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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


§ 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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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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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:

https://www.dropbox.com/s/pt61i61h4t4i7gx/Jim%20eApp%20video_11-06-

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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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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


§ 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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Vendor Selection

§ Key Decision Factors

§ Company

§ Solution/Technology

§ Implementation/Integration

§ Proposal/Price

§ AXA Germany Solution

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Insiders Technologies - smartFIX

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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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Challenges

§ Overlapping project resources

§ Integration with admin systems/workflow

§ Infrastructure (Fax Server)

§ Optimization Ramp Up

§ Change Management

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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

www.renolan.com


www.axa-equitable.com


201305 - ACORD LOMA Conference: e-Insurance

Economy & Finance

Transcript of 201305 - ACORD LOMA Conference: e-Insurance