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Insurers Upgrade Call Center Technologies To Improve Customer Experience

Insurers like Farmers and Esurance are changing their contact center philosophies and upgrading call center technology in an effort to improve customer satisfaction and boost customer retention.

There's a commonly held belief that hitting a baseball is the most difficult thing to do in sports. In fact, a player talented enough to fail at the task only 70 percent of the time can make millions of dollars a year and earn the admiration of fans around the world.

Unfortunately for insurers, their contact centers are held to a much higher standard.

Increasingly in the insurance space, customers are won or lost based on contact center performance. A June 2007 report from Ann Arbor, Mich.-based CFI Group, the Call Center Satisfaction Index, found that 61 percent of consumers who have a bad customer service experience with their insurer's call center consider switching companies.

As one of the few touch points where insurer and insured interact, a call center gives carriers an opportunity to provide superior customer service and raise retention rates. And while some forward-thinking insurers are leveraging technology in the space to gain competitive differentiation, many others continue to view their call centers as cost centers -- essentially never stepping up to the plate.

"Too many insurance companies have traditionally looked at call centers as an expense line, and thus have looked at call center optimization from an expense standpoint," says Greg Powers, vice president of sales and business development for Newton, Mass.-based Innovation First Notice, a claim-reporting outsourcing services and software provider.

"It's not a cost center -- it's not something you throw out there and try to rip costs out of," explains Sheri Teodoru, program director and partner with CFI Group, who authored the contact center study, which also found that customers reported below-average satisfaction with insurance contact centers. "This is a chance to be a hero with your customer."

The Customer Is King

While the technologies available to improve call centers are varied, the end goal behind most are the same: improved customer satisfaction. It's an area where there is much room for improvement.

The industry scored poorly in the Call Center Satisfaction Index, with a score of 68 on the Index's 100-point scale. Of the six industries included in the report, only the personal computer industry scored lower.

Ronald Hildebrandt, cofounder and vice president of sales and marketing for performance optimization solutions provider Enkata (San Mateo, Calif.), says that while insurance companies traditionally have lagged behind other industries in terms of call center technology and functionality, they have made big investments in the space over the past five years. "It's not just because they've had money lying around -- it's because it's become a competitive necessity," he asserts. "In the past, some insurers treated customer service as a necessary evil. That's changed a lot," he adds of call centers in the health insurance vertical, which accounts for a large portion of Enkata's client base.

Hildebrandt points to the advent of consumer-directed healthcare as a key driver behind the change. He estimates that 20 percent to 30 percent of healthcare costs are now paid directly by the consumer through co-pays and high deductibles. As a result, consumers are taking a more active role in decision-making.

"The power has clearly shifted to consumers in healthcare, and that shift is only going to be accelerating. That's really woken people up," Hildebrandt says. "About three years ago, [health insurers] started making investments in new CRM systems, better switches, call recording, analytics and performance-management technologies to be on top of how they are treating customers."

Meanwhile, industry experts in other lines of business are coming to similar conclusions and seeing similar movement.

"We realize that the product of insurance, particularly in personal lines, is becoming more and more of a commodity," says Jim Snikeris, VP of operations for Farmers Insurance's agent-facing call centers in Texas, known as ServicePoint centers. "The differentiating factor on why a customer will select one company over another is definitely going to be the experience they get and the service levels they receive. From a pricing point of view, one day we will be higher and one day we might be lower than the competition. Rates will change, so the real driver is service."

As customer satisfaction has become a priority within insurance contact centers, so too has the first call resolution (FCR) metric. According to Donna Fluss, president of contact center and analytics firm DMG Consulting (West Orange, N.J.) and a 24-year veteran of the contact center industry, there is a correlation between FCR, customer satisfaction and customer loyalty. "FCR has been increasingly used as a way to measure how a call center is doing its job. It's getting a lot of attention today because it's a rather rapid way of measuring the performance of the shop," she says. "When you take care of something right away, you earn the right to extend and enhance that relationship."

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