Fortune 100 Life Insurance Carrier: Process Standardization and Automation Rapidly Boost Employee Productivity and Policyholder Experience

Project Background

A leader in life insurance products for direct marketing channels in North America struggled to recruit and retain customer service reps (CSRs) for its contact-center operations. And the implications were more serious than simply long, frustrating wait times for callers. That’s because nearly half of all inbound calls involved intense efforts by CSRs to reinstate lapsed policies and avert customers from canceling existing policies. Although policy lapse rates had not increased, the shortage of experienced staff meant that success rates for reinstatement efforts were declining steadily.

Consequently, this profitable life insurance division of a global, multi-line insurer was finding it harder to maintain its levels of in-force policies—and margins were steadily eroding. The company had previously made substantial investments in efforts to attract and retain new CSRs. For example:

• Base compensation was increased significantly.
• Incentives for reinstatement specialists were doubled and payout cycle times slashed.
• Technology modifications to a recently deployed call-processing system enabled work-from-home and flex-time schedule options for all reps who successfully completed their training and a brief probationary period.
• Yet the insurer’s senior leadership team was frustrated at the continued CSR shortage.

Meanwhile, the head of contact-center operations had performed his own investigation into the causes of the inbound calls. Although the research was informal, his discussions with CSRs provided some anecdotal indications that promising opportunities existed in two areas in particular:

• Reducing issues “upstream” in policyholder onboarding and communications
• Automating more of the “mindless,” repetitive tasks required of CSRs

He was especially intrigued by the idea of eliminating inbound calls wherever possible. The detailed standardization and automation examples provided by The Lab were a “direct hit” on this topic. He convinced the organization’s leadership team to delay implementing further increases in CSR compensation and instead launch a Phase I Analysis and Discovery initiative with The Lab.

Client Description, Project Scope, Objectives

This direct-marketing life division was a subsidiary of a top-ten global multi line insurance company. This subsidiary was built through acquisitions. Although operations of the acquired insurers were consolidated and centralized, their brand identities were maintained for marketing and sales. The scope of the Phase I initiative included approximately 2,000 employees across three contact-center locations, although many CSRs across those locations worked from home.

Over 85 percent of each employee’s work activities (approximately a two-minute duration) were documented and analyzed. The objectives focused on identifying improvement opportunities to:

• Eliminate avoidable calls
• Reduce administrative call-handling times
• Decrease policy-lapse rates

Executives were especially interested in increasing the effectiveness of the reinstatement team—a sales team charged with re-selling (and often upselling) policyholders whose policies have lapsed.

Overview: Phase I, Analysis and Discovery

The contact-center standardization initiative began with an eight-week Phase I Analysis and Discovery initiative. This work effort covered all of the major policyholder services business processes, including:

• Inbound call processing
• Customer issue resolution
• Reinstatements
• Beneficiary changes
• Workforce management

The Lab’s consulting analysis and data science team deployed our database of life insurance policyholder services templates, including:

• Industry standard KPIs
• Related data taxonomies
• Business process maps
• Operations benchmarks
• Best practices
• Automation “use cases”

These enabled rapid process mapping, documentation and analysis of more than 85 percent of employee work activities (each being approximately two minutes), while only requiring one hour per week of any of the client’s subject matter experts’ (SME’s) time.

During the Phase I analytical effort, The Lab and the client’s internal improvement team identified more than 120 activity level improvements and documented which of these applied to each of the three call center locations.

Approximately 60 percent of these improvements represented non-technology, standardization improvements that reduced error corrections and/or enabled automation. While the remaining improvements were technology-dependent, no new systems were required.

• Roughly half could be automated using the existing technology after the work was standardized.
• The remainder were automated using robotic process automation (RPA) and small, low-code applications e.g.,
  • Automated forms
  • APIs
  • Others

Many automations could be further augmented with artificial intelligence (AI) for simple decision-making and proactive, real-time notifications. Better still, all of these improvements were able to be implemented in eight months or less. Benefits from non-technology standardization “quick wins” began to accrue within six weeks of the start of implementation. These quick wins built momentum and helped to fund further improvements throughout the enterprise.

Findings: Phase I, Analysis and Discovery

Analysis revealed that the current performance reporting understated the true extent of the issues facing the business. Problems were all higher than reported—sometimes by as much as 10 to 30 percent.

These problems included:

• Missed payments
• Processing error-rates
• Lapsed policies

Because of this, first-call resolution rates were below acceptable targets. And average handle times varied excessively at the CSR level—sometimes by five times or more—for similar call types.

The single largest cause of missed payments and policy lapses was conflicting brand identities on:

• Policies
• Websites
• Invoices
• Emails

This brand confusion also squandered the firm’s extensive investment in direct marketing and advertising—the lifeblood of its revenue engine.

Other standardization improvement opportunities also contributed to the excessive volume of avoidable calls from prospects and policyholders. For example, the division’s self-service capability for policyholders was underpromoted and consequently under-used. Policyholders found it easier to call the contact center for assistance updating their personal contact information and other simple requests.

A lack of visibility similarly made it difficult for employees, prospects, and policyholders to understand the status of their payments, policies, and benefits without directly contacting an individual and launching an inquiry. 

These avoidable calls, coupled with the extended handle times, diminished policyholder experience and “ease of doing business” with the company. Policyholders were frustrated at the level of effort required to get an answer. This, in turn, pushed lapse rates ever higher.

Overview: Phase II, Implementation

The eight-month, self-funding Phase II implementation effort was able to simultaneously increase CSR productivity, upgrade customer experience, reduce lapses, and deliver cost reduction.

Specific, measurable improvement goals were established for the client by each:

• Location
• Team
• Individual CSR

Improvements implemented throughout the client’s various policyholder services groups succeeded in:

• Increasing organizational speed and effectiveness
• Reducing unnecessary expenses
• Designing and installing new standards to simultaneously improve:
  • Productivity
  • Work quality
  • Service levels

Senior management could perform the work with any mix of resources they chose:

• Internal resources
• The Lab’s resources
• Others

Life Insurance, Policyholder Services Improvement Examples: Phase II, Implementation

The Lab consolidated the 120+ improvements into a self-funding implementation work plan, organized into a handful of major work streams, including the three examples below.

IMPROVEMENT EXAMPLE #1 – Upgrade performance reporting

The Lab helped reduce the quantity of existing management reports by two-thirds and standardize the existing key performance indicators (KPIs).

This KPI redesign enabled automation of most report preparation tasks—previously manual— by capitalizing on features in the existing call-center technology. Individual employee performance KPIs were simplified and made available, confidentially, to each worker. Anonymized averages provided benchmarks for comparison and variance reduction. Robotic process automation was added to push alerts to managers and draw their attention to outlier employees, both high and low performers.

IMPROVEMENT EXAMPLE #2 Standardize and automate correspondence

Correspondence for prospects and policyholders was centralized; automated notifications were deployed to monitor exceptions, or “maverick” correspondence. Standardization templates were developed for all vehicles: hard copy, email, texts, and CSR scripts.

Predictive analysis (AI) helped anticipate correspondence needs and prompt employees with suggested vehicles, timing, and message details. Workflow automation was installed to populate correspondence templates with customized information—name, address, policy information— and send communications to policyholders with the click of a button (or in some cases, with no human interaction).

IMPROVEMENT EXAMPLE #3 – Automate lapse preemption

The Lab helped further identify, refine, and ultimately automate preemption of the “root causes” of in-force policy lapses. Two of the top five lapse root causes were addressed with one-time, non-technology changes, including updating CSR scripts to add more emphasis on setting up automatic premium payments. Others resulted from predictable, repetitive issues that could be addressed with automation: upcoming or missed-payment notifications, credit card expiration alerts, and others. This effort also involved simplifying existing policyholder notifications (e.g., lapse notifications), many of which had not been formally reviewed in several years.

To monitor and sustain the impact of these changes, standard KPIs with basic predictive capabilities (AI) were installed to alert reps in advance and launch preemptive correspondence or contact.

The Lab Makes it Easy

Organization-friendly engagement design

At The Lab, we’ve spent three decades refining every aspect of our transformation engagement model. We’ve made it easy for clients—from the C-Suite to the front line—to understand and manage the initiative:

• Minimal use of client time: One to two hours each week, maximum.
• Measurable benefits: Typical 12-month ROI is 3x to 5x.
• Pre-built templates and tools: Process maps, data models, bots, and more.
• U.S.-based, remote delivery: Nothing is ever outsourced or offshored.

Designed to reduce risk, increase success

Since 1993, The Lab has led the industry in eliminating risk for our clients. Whether your engagement involves a handful of bots or wall-to-wall transformation, we make it easy to do business with us:

• Fixed pricing and clearly defined scope
• Early-out checkpoints and options
• Money-back guarantees

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