By: Peggy Bresnick Kendler
This Month's Experts
VP of Information Systems & Technology, Delta Dental Plans, Oak Brook, IL
Director, Strategy, E-Business Solutions Unit, The Hartford
Chief Services and Information Officer, Humana, Louisville
Insurance Industry Analyst, Gomez, Inc., Waltham, MA
Financial Services Industry Strategist, PeopleSoft, Pleasanton, CA
Q: What are the benefits to insurers of pursuing a self-service strategy? What have been the results of some of those initiatives?
A: Ross Gosnell, Delta Dental Plans: In short, the major benefit is reduced administrative costs and 24x7 access to information. Significant savings can be achieved by moving the conveyance of information out of the customer call centers and into automated interactive voice response systems and Web portals. In most cases, the timeliness of getting information faxed to you or your ability to review pages on the Web instead of waiting in a phone queue provides improved customer satisfaction.
A: Jim Devoe, The Hartford: Policyholders of The Hartford benefit when they can make a simple automobile endorsement online because they have convenience, choice, and control. Our agents benefit when they can do a claim inquiry on behalf of their customer. The Hartford benefits by shifting greater attention to more complicatedservice issues, as more routine tasks are handled self-serve.
A: Bruce Goodman, Humana: The benefits of pursuing a self-service strategy are improved service, lower costs, increased satisfaction and true product innovation. Our stakeholders have definitely embraced self-service for many of their needs. Our business opportunities have increased as a direct result of our self-service strategy-primarily due to combining innovative product offerings that have customizable benefits with interactive decision-support tools that help in choosing those benefits.
A: Chris Yaldezian, PeopleSoft: Most call center activity costs, on average, between $5 and $10 per call, while Internet transaction costs are generally less than a dollar. On the surface, this would seem to suggest that a self-service strategy is more cost-effective. However, that's not entirely the case. Research has shown that activity for Internet self-service users is higher than for customers who use the call center as their means of communication. Self-service customers like the flexibility of having access to the information and services they need whenever they need it. As a result, they do more frequent transactions. So, in the end, the cost reduction to the insurance company is not 100 percent of the reduction in cost between a call to a call center and Internet self-service.
A: Tim Carpenter, Gomez: One of the great benefits of self-service is satisfaction and retention of desirable policyholders. Our clients indicate that policyholders enrolled for secure policy access have, on average, more policies with the carrier, are younger and represent a higher retention rate. In addition there is significant potential for cost savings in areas such as online document imaging.
Q: What are the risks of self-service and how can they be avoided?
A: Devoe, The Hartford: There's always the adoption risk. At The Hartford, we believe there will be an inexorable trend toward higher levels of self-service, but timing is everything. We mitigate that by staying close to our customers, by getting critical, independent assessments of our service offerings, by investing in good research, and by taking the long view.
A: Gosnell, Delta Dental: One of the risks of self-service is to force a solution when there is a real need for human intervention to address the issue. Self-service solutions are not 100 percent effective. There should be the opportunity in any self-service solution for a customer who has reached a certain level of frustration with the provided solution to option out to a customer service representative. This applies either to someone trapped in a call flow scenario within the automated phone system or alternatively running into limitations of information available on a Web portal.
A: Goodman, Humana: The risks of self-service are lack of adoption, dissatisfaction and disintermediation. To ensure adoption, we started with what stakeholders wanted-not just what we wanted to give them. To avoid dissatisfaction, we only implemented services that made sense to provide via certain channels (e.g., through the Web, interactive voice response, channel partners), avoiding disintermediation scenarios and always treating privacy as a paramount concern.
A: Carpenter, Gomez: One of the most significant risks of self-service today is investing in technology without supporting it with the promotion necessary to drive adoption. Two of the three reasons most often cited by general Web users for not attempting self-service tasks online are that they didn't think of it or they weren't aware these capabilities existed. If carriers want to realize success in this field they will need their agents to actively promote the utilization of these service options while reducing less-valuable administrative touch points.
Q: What are the key technological considerations involved in setting up and/or maintaining customer self-service functionality? Are there any recent technological developments that might make the self-service process more successful?
A: Gosnell, Delta Dental: Unfortunately, the assumption that everyone uses the Internet is not quite true. Our biggest benefit in the self-service arena currently comes from the use of the interactive voice response system. Most providers would rather have a fax document coming to them after a brief interlude into the phone system than look up details on the Web portal and subsequently print Web pages. In our case the information solution is available from either source. In this scenario the delivery of the information is not new technology, but effective technology. On the other hand, the Web offers opportunities to push your applications out to the entire world with editing, functionality, and security not previously available.
A: Devoe, The Hartford: We all need to strike a balance between ease of use and ease of abuse. We're well aware of cyber-risks, but we're also keenly aware of the demand for simplicity and speed. So that's the big wild card for all of us. How does technology help us promote ease of use, while protecting against abuse?
A: Goodman, Humana: Key considerations in establishing and/or maintaining self-service solutions are providing consistent information across channels, contact logging across channels, channel-specific support and role-based security. We have partnered with a number of vendors that have, or make possible our delivery of these capabilities. The most commonly used technology is XML.
A: Carpenter, Gomez: The most pressing concern when rolling out self-service functionality is determining where the gamut of customer data currently resides and to what extent existing infrastructure can allow for this information to interact on the customer's end. Data interaction capabilities must be assessed realistically before a carrier can begin to develop a Web self-service strategy. Insurers are unique relative to other financial services companies. Personal, policy and rating data resides on a multitude of legacy systems. Since geography determines product availability and pricing, data is often dispersed among regional systems, making immediate access upon enrollment a challenge. Our research shows that the number-one reason online insurance users abandon the enrollment process is that they were unable to get immediate access. The infrequency with which policyholders interact with their insurance company necessitates removing the largest obstacles to successful enrollment.
A: Yaldezian, PeopleSoft: The key consideration is integration of legacy line-of-business systems with a front-end portal that will provide real information to consumers. Carriers understand they can't expect consumers to learn their systems, so they realize they need to put an easy-to-use, self-service front-end in place for consumers. However, that means they have to integrate their back-end systems (policy, claims and billing systems) with this front-end customer portal. This can be a daunting task.