Insights from The Lab

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

Policy Administration

A leader in life insurance products for direct-marketing channels in the U.S. 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 cancellations. 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 made substantial investments in efforts to attract and retain new CSRs. 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 some investigation into the causes of the inbound calls. Although the research was informal, his discussions with CSRs provided anecdotal indications that promising opportunities existed in two areas:

• 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 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. The subsidiary was built through acquisitions. Although operations of the acquired insurers were consolidated and centralized, the 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 worked from home nationwide. Over 85 percent of each employee’s work activities (approx. two-minute duration) were documented and analyzed. The objectives focused on identifying all improvement
opportunities to eliminate calls, reduce administrative call-handling times, and increase the effectiveness of the reinstatement team—a sales team charged with re-selling (and often upselling) policyholders whose policies have lapsed.

Phase I, Analysis and Discovery

The contact-center standardization initiative began with an eight-week Phase I analysis covering several key customer-service business processes, including:

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

The Lab’s database of life insurance customer-service templates—including industry-standard KPIs, process maps, benchmarks, best practices, automation “use cases,” and more—enabled rapid documentation and analysis of more than 85 percent of employee work activities (approximately two minutes each), while only requiring one hour per week of any subject matter expert’s (SME’s) time.

During the Phase I analytical effort, The Lab and the client’s North American internal improvement team identified over 120 activity-level improvements. Approximately 60 percent of these represented non-technology, standardization improvements that reduced error corrections and 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), sometimes augmented with artificial intelligence (AI) for simple decision making.

Better yet, all improvements could be implemented in eight months or less, with benefits beginning to accrue from standardization within six weeks of the start of implementation.

Phase I findings

Analysis revealed that reported performance understated the extent of the issues facing the business. Problems such as missed payments, processing error-rates, and lapsed policies were all higher than reported – by 10 to 30 percent. First-call resolution rates were below target. Average handle times varied at the CSR level—sometimes by 5x or more—for similar call types.

Conflicting brand identities on everything from policies to websites and invoices created confusion that was the single largest cause of missed payments and policy lapses. This brand confusion also squandered the firm’s extensive investment in direct marketing and advertising—the lifeblood of its revenue engine.

Other opportunities: The division’s self-service capability for policyholders was under-promoted and consequently under-used. A lack of visibility 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.

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.

Improvement goals were established for each location, team, and CSR. Senior management could perform the work with any mix of resources they chose: internal resources, The Lab’s resources, or others. The Lab maintains a three-tiered service-offering structure (plus ongoing post-implementation support) to make this as flexible and sustainable as possible for clients:

Post-Implementation Support, Sustainability & Automation

The Lab provided hassle-free post-implementation hourly sustainability support for this client to maintain automations, process standardization, and operational data analytics models implemented during the Phase II engagement. If the client’s team was not up-skilled enough to perform any needed automation updates, they leaned on The Lab for Tier 3-level support. If analytics dashboards required additional views or data connected, The Lab’s team was a simple phone call away.

Improvement Examples, Service and Distribution Standardization

The Lab consolidated the 120+ improvements into a self-funding implementation work plan. Examples:

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
• Pre-project feasibility/value assessments at nominal cost
• Early-out checkpoints and options
• Money-back guarantees

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