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Balancing between High-Tech & High-Touch

Insurers are walking a fine line, trying to reap the economic benefits of offering online self service, without alienating customers or intermediaries.

No one ever said insurance was fun. In fact, a recent Doculabs study reveals that, because consumers lack passion for insurance, it's a topic they'd rather not think about. People would rather leave it to an expert, especially when the topic is complex—although they might be willing to educate themselves on a fundamental level, notes James Watson, president of the Chicago-based analysis and advisory firm.

These findings seem to paint a bleak picture for carriers looking to reduce operational costs by having their policyholders complete certain types of insurance transactions online. But, despite the customer push-back, a growing number of insurers are intrigued by the significant cost savings and customer-retention benefits (whether those customers are policyholders, benefits managers or producers) to be gained through online self-service. Still, it is hard to gauge customer satisfaction with—or use of, for that matter—a Web-based tool before it's implemented. And in these rough economic times, notes Watson, technology decision-makers are skeptical of investing in new projects without being sure of ROI. "We can measure satisfaction discreetly on the phones—we know that two percent of callers ask to speak with a supervisor," Watson explains. "To take a wild gamble with the Internet and have customers dissatisfied is a high-risk proposition."

Furthermore, with the dot-com collapse, companies aren't feeling as much pressure to be the first to service customers online, says Greg Ross, president, eStrategies Consulting, Inc. (Acton, MA), an e-business strategies consultancy.

For many insurers, pursuing online self-service involves playing a tricky balancing act, not forcing customers into it but gradually trying to familiarize them with the concept and its benefits. Although different companies have different value propositions, many are taking a similar approach to self-service. Nancy Treaster, senior vice president of global marketing, Witness Systems (a Roswell, GA-based provider of software that tracks customer movement through Web sites), explains that some of Witness' insurance clients are focused on extending the initial online self-service experience into something more interactive. "They are actively trying to make assisted transactions through 'call-me' buttons," says Treaster. "They will politely ask you if you would like someone to call you back and they will be very focused on having that human interaction."

Help Me, Help You

This balanced approach-helping customers help themselves at a basic level and then steering them toward some form of live assistance—is how most insurers are enabling online self-service, according to Kimberly Harris, senior analyst, financial services, Gartner, Inc. (Stamford, CT). Not only does it make sense for policyholders, this process also provides support for agents and other intermediaries, she asserts.

In some instances, the availability of online self-service capabilities is simply a response to customer demand. Blue Shield of California's (San Francisco, $1.4 million in assets) was developed after the company conducted research with focus groups composed of its members and health customers in general, according to Brian Clinch, director, individual and family plans direct sales. The insurer reasoned that, since only a fraction of customers are interested in filing claims in a given period of time, members and potential customers might be better served through services that everyone could use all the time.

Most of those surveyed by Blue Shield of California said that they thought about health on a general basis, external to insurance. The carrier decided that customers and potential members would be best served by offering them health information—a topic about which they are passionate—online. In addition to information on health issues, the site has a drugstore link, provider finder and two sales guides. Also, both potential and current members can register for a free personalized Web page.

The site has an interactive plan finder tool called Wizard, Clinch reports. "Policies can cost between $50 and several hundred dollars a month, so Blue Shield of California decided to set up a tool that was customer-centric," he explains. "Questions are centered around the things customers think about, and then plan recommendations are made." Around 30,000 people have used the tool in the past six months, and most, according to Clinch, actually picked up the phone to purchase the policy that was recommended to them.

Blue Shield of California offers the kind of functionality that, according to Doculab's Watson, customers will respond to and use online. In reality, Watson says, customers will do anything online if it does not involve money. "If there is any need to settle a claim or get a benefit check, a policyholder will want to get on the phone and talk to a human," he says.

Wouldn't live chat technology provide the best of both worlds in this regard? Although it seems that a live chat feature could put a consumer in real-time touch with an agent or customer service representative and also smoothly transition the self-service process, Gartner's Harris reports that most insurance sites lack this kind of collaboration capability. "It's nice to send an email, but it's really hard for a consumer to log off the computer and call if there's only one phone line," she says. "Lack of collaboration ability isn't making it easy for consumers to adopt these new behaviors." Harris explains that of the 17 percent of large insurers that had interactive sites by the end of 2000, very few featured live chat capabilities. "The way these sites are most commonly integrated is through e-mail and call-back features," says Harris. "With the call-back feature, users have a dialogue box where they can request, 'Call me back at 8 o'clock tonight at this number.'"

Providing Incentives

Other carriers echo Blue Shield of California's concerns about online activity. For example, Humana's (Louisville, more than $4.1 billion in assets) CIO Bruce Goodman admits that his biggest challenge is getting customers (members, employers, producers and physician/ providers) to use the health benefits company's Web site ( However, Goodman points out there are numerous incentives for members to serve themselves online—especially the ability to gain information 24x7. Also, the site allows consumers to visualize information rather than just hear it over the phone. "You also might not be 100 percent sure of what you are looking for," says Goodman. "You can scan data and find out information that you didn't even know you should ask." Policyholders are informed of the site's functionality in communications such as mailers and bill stuffers.

Sometimes increasing awareness and use of the company's Web site and its self-service capabilities can be a double-edged sword for an insurer. For example, providing policyholders with more information online (including conditions and situations they didn't even know they should ask about) usually leads to an increase in call center activity. "This is one of the interesting things our study found," says Doculab's Watson. "When companies offer service functions online, a customer may, for instance, change their address and might find that the company offers life insurance discounts."

So, if a company had hoped to decrease call center volume by 10 percent through growth in online activity, explains Watson, there may only be a seven percent reduction in calls—what is actually a three percent increase in calls. However, emphasizes Watson, "this is positive, because it implies that when people learn more they establish a deeper relationship and a broader dialogue."

Another irony relating to self service is that while many carriers are reluctant to expand self-service functions because of the risks of agent disintermediation, in fact producers are using more online functions than are policyholders. For example, Humana's Goodman reports, agents and brokers enjoy the efficiencies that come with writing new business and servicing their existing customers on Humana's site.

Taking Agent into Account

Customer service strategies need to take the agent into account, according to eStrategies' Ross, who also stresses that companies must be sure that agents are alerted when a customer makes a transaction online.

The Hartford Financial Services Company's (Hartford, $170.6 billion in assets) online strategy focuses on servicing agents so that they, in turn, can better serve insureds. "We look at self-service to enhance relationships, especially with producers so they can service their customers and strengthen relationships," explains Candace O'Shea, vice president of e-business technology solutions at The Hartford.

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