Presentation at 2013 ACORD LOMA Conference on moving insurance to a world of digital congress, from electronic apps to e-signatures, straight through processing, and image management. Presented in partnership with AXA Equitable's Nick Intrieri
3. Automating insurance processes driven by
- Rapidly advancing technology
- Accelerated consumer adoption
Integrated service experience solutions drive
‐ Increased profitability
‐ Improved customer satisfaction
‐ Improved retention
Session Objectives:
‐ Determining opportunities for achieving integrated service
‐ Identifying key service delivery technologies and how they work together
‐ Assessing service delivery deficiencies
3
Session Overview
4. PC Claims Severity
Industry Faces Challenging Times
4
Investments
Regulation
Market Exits
Technological Advances
Competition
Life Insurance Ownership
5. Demands on Service Amplified
More Diverse Consumers
Surge in New Service Mediums
Five Generations of Consumers, Large New Wave Coming
(% of Total Population)
Greater Ethnic Diversity
The Digital Generations
- powerful consumers
5
6. 6
And Diversity Drives Expectations
0
10
20
30
40
50
60
70
80
Millions
GI Swing Boomer Gen X Gen Y
High TechLow Tech
Increasing Customers Demands
• Immediacy / 24x7 access
• Transparency
• Personal service relationships
• Language differences
• Benchmarks within and outside the industry
Agent > Mail > Phone > Fax > Email > Website > Chat > Social (FB, Twitter)
8. With Less Room for Error
8
Key sources of service frustration and probability of switching:
Best way to prevent switching?
• First contact resolution 67%
• Reward & recognition for doing more business 54%
• Preferential treatment 44%
*Accenture 2012 Global Survey
62%
64%
65%
70%
71%
73%
77%
78%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Attempts to cross sell when calling for…
Having to repeat same information over…
Long hold times when calling service
Staff unable to answer question
Business policies that inhibit delivering…
Multiple attempts to get problem resolved
Unfriendly or impolite service staff
Incorrect product or service provided
9. “… a modest increase in
customer experience will
increase customer loyalty
and boost revenues by
approximately $298 million
for a $10 billion insurance
provider.“
Forrester Research, February 17, 2010
“Nationwide Insurance
found that a 1% increase
in customer retention
increased annual
premiums by $1 million”
Insurance Tech. - CRM in Global Insurance,
Datamonitor, 2008.
“Reducing customer
attrition by 5-10% can
increase annual profits by
as much as 75%, according
to a study by the Wharton
School.“
Eight Strategies for First Rate Customer
Service, Cisco Innovators, January 2008
Customer is a King with Great Power
Tens of thousands of positive service touchpoints
a day, and yet one bad interaction…
And suddenly your
company is at the top
of the tweets list telling
thousands followed
quickly by a Facebook
“Unlike” Fan Page.
9
Before Social Media
Today’s Customer
10. Strong Service Delivers Revenue
10
Strong Customer
Experience Management =
Improved Revenue
Red = Lost Revenue / Customer Turnover
Yellow= Incremental Revenue,Existing Customers
Dark Blue = NewCustomer Revenue
Light Blue = Net Change in Revenue
AverageBest-In-Class Laggards
Net Up $273M Net Up $84M Net Down $43M
11. And Companies Are Acting
Expanding Accessibility 100%
Accelerating Service Delivery 96%
Increasing Hours and Days of Service Availability 82%
Creating Different Levels of Producer Service 82%
Consolidating Similar Functions Across Divisions 75%
Creating Different Levels of Customer Service 63%
Aligning Operations with Customer Markets 63%
Consolidation of Call Center Operations 57%
Aligning Operations with Distribution Channel 57%
Consolidating Physical Locations 50%
RespondentsArea of Focus
11
12. 12
Evolving the Service Delivery Model
One Size Fits All
§ Same service for all segments
§ Over investin some, under
invest in others
§ One model to manage
§ Differentiation created at
company vs. segmentlevels
§ Easier to match capabilities
Evolving Model
§ Segmentationof needs and
value
§ Service matched to segment
needs
§ Appropriate service investment
in each segment
§ More challenging model to
manage but also …
§ Harder to replicate by the
competition
13. Based on Differentiated Customers
Predictive
Analysis
and
Modeling
Low Medium High
Propensity to Convert
High value,
Low
conversion,
2nd Priority
High value,
Medium
conversion,
Top Priority
High value,
High
conversion,
Top priority
Good value,
Low
conversion,
Low Priority
Good value,
Medium
conversion,
2nd Priority
Good value,
High
conversion,
Top Priority
Low value,
Low
conversion,
Low Priority
Low value,
Medium
conversion,
Low Priority
Low value,
High
conversion,
2nd Priority
Potential Value
LowMediumHigh
Potential
Future
Value of
Customer
Scoring of prospects based on conversion and
value, marketing strategy developed to match
Survey
Data
Web
Log
Data
Text
Data
Purchased
Data
Psycho-
graphic
Data
13
14. At Acquisition and Retention
Match effort to risk/value
• Target high efforts
on high value /
high risk
• High value / low
risk gets medium
effort
• Low value = low
cost efforts
14
15. Using Life time Value
Time of Purchase
Demographics -
Loses predictive
value over time
as relevance is
superseded by
inforce behaviors
Customer behavior
shifts focus from
current to future
value
Predictive
Analysis
Current
Value
Future
Value
Post Purchase
Activity –
Increases in
predictive value
over time as
behavioral
patterns
develop
15
16. 16
Leveraging Technology to Deliver
From:
To:
Phone
Paper
Email
Text
BYOD
Web
Service Delivery Process
Self-Service
Resolution
Chat Video
Transfer Dialer
• Real time availability becomes key
• Interactive online rules, forms and data needed
Note: Social Media is a transport
Process = Requestà Process à Resolution
17. In Claims Too
FNOL Evaluate
Claim
Close
Claim
Negotiate /
Initiate ServicesPredict duration
Forecastloss reserves
Optimize fasttrack claims
Prioritize resources
Fraudulent scoring
Litigationpropensity
Prioritizedinvestigation
Focus on organizedfraud
Minimizeclaim padding
Reduce false positives
Identify salvage and subrogation
opportunities
Indicate deviations fromsimilar
claims
Initiate
Settlement
SIU
Update
Claim
Fraud Referrals Fraud Referrals
Re-estimateduration
Reassess loss reserving
Prioritize resources
Fraudulent rescoring
Reviewlitigationpropensity
Cross-selloptions for satisfied
customer
Customer retentionprogram
Assign
Claim
Fast Track Claim
17
18. Top Targets in Play
§ Baseline requirement: Is Workflow in place?
§ Acquisition:
– Sales support Expanding use of mobile devices
– Electronic app Fairly straightforward, forms library
– E-signature More complicated, issues addressed
– Straight through processing Multiple solutions, fairly mature
– Rules based underwriting Continuous advancements
– E-delivery Multiple solutions, market issues
§ Management
– Self service web portals Moderate advances
– Interactive chat Available but not used
– Mobile transactions Early on curve
– Social media triggers Being defined, used for engagement
§ Delivery
– FNOL submission Rapidly expanding
– Automated Claims Review Starting up, analytics, webcams
– In-process communications Fairly new, similar to management
– Direct delivery of payment Mature
18
20. 20
Common Issues and Challenges
§ Piecemeal approach – missing integrated solution
– May be multi-vendor, but still must integrate
– End to end flow
– Reusable solutions: e-Policy Delivery = e-Confirms = e-Statements
§ Misalignment of service strategy and corporate strategy
– Customers being focused on?
– High impact areas?
– Competitive Differentiation
§ Focused on technology solution and ignore business process
– Should be business led, technology enabled
– Outside in view: Is it seamless? Does it flow without redundancy?
§ Lack of follow through
– Reusability is key to fully deriving benefits and delivering service
22. 22
Background - Policyholder
E-Insurance
Strategies
§ Life and Annuity carrier
§ Customer Snapshot: ~2.9M clients, $138B of in-force assets
§ Challenge: Increasing operating expenses and stagnant web
utilization
§ eDelivery penetration low
23. 23
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Self Service Tools
§ Online Account Access: Non financial transactions, account
balance inquires, trades
§ eDelivery options: Statements, Prospectus, Annual Reports
§ Win/win for client and carrier?
§ In 2010: 24% Online Account Access; 5.1% eDelivery
Why is the adoption rate so low????
24. 24
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Motivation and Awareness
§ Lengthy enrollment process
§ Previous marketing strategy inserts and envelopes
§ Client incentives unclear
§ Company incentives very clear (eDelivery):
$~$26M Company Wide Annual Print & Postage Spend
25. 25
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Savings Breakdown
What is the best way to increase eDelivery?
Inforce Prospectus
Annual Report
Semi-Annual Report
Statements (4x)
Confirms (6x)
Marketing Budget
Service Center Budget
26. 26
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Action Plan – Provide Incentive
§ Launched AXA Equitable eDelivery Sweepstakes in 2010
§ Emphasized “Go Green” Theme
1. Grand Prize – Hybrid Car (2011 Ford Fusion)
2. 154 First and Second Place Prizes
3. Contest Spanned from January – October 2010
4. Separate “Employee Sweepstakes” for AXA policy
holders
5. Goal – Increase eDelivery rate by 3%
27. 27
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Marketing Strategy
§ Stuffers in
statements/confirms:
§ Email Campaign:
28. 28
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Risks & Challenges
§ Compliance and Legal
§ Sweepstakes Administration
§ IT Implementation
§ Marketing Campaign (Email)
29. 29
Policyholder
• Build a client experience that is efficient and gratifying
• Provide awareness of digital tools through effective marketing
techniques
Results
E-Delivery grand-prize winner John Holland with
VP Accumulator Field Services Jim O'Boyle, VP,
AXA Equitable and Larry George, Financial
Professional, AXA Advisors. – Chattanooga
Times
§ Increased eDelivery enrollment 161% from
prior year
§ Company save ~$1M annually
§ Positive customer feedback
§ 2012 Sweepstakes yielded additional 50%
enrollment increase
§ Currently at 11.5% eDelivery adoption rate
30. 30
Background – Advisor
E-Insurance
Strategies
§ 50% of Variable Annuity business from Retail Sales Force (AXA
Advisors)
§ 100% of applications submitted via Paper
§ Complex variable annuity products (SCS, Retirement Cornerstone)
§ NIGO Rate for AXA Advisors >50%
§ 3rd party electronic order entry (Aplifi, Ebix) 20% NIGO Rate
31. 31
Advisor
• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of
investment
Clear Opportunity – Annuity eApp
§ Eliminate multiple manual touch points that result in high
NIGOs
§ Further AXA’s strategic goals of straight through processing and
brand recognition
§ Position AXA as an industry leader in technological
advancement
eApp + eSignature = Straight Through Processing
32. 32
Advisor
• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of
investment
Challenges
§ Vendor Selection Process
§ Integration of eSignature within eApp and downstream systems
§ Regulatory environment difficult to navigate
§ Budget and timeline to implement tight
§ Reaching aggressive adoption targets (50% Adoption Year End)
33. 33
Advisor
• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of
investment
System Design
35. 35
Advisor
• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of
investment
Rollout Plan
§ Launched pilot in 3 branches Jan - March
§ Multiple WebEx Training Schedules for Admins, Advisors, and Branch
Operations Managers
§ Comprehensive Communication Plan
1. Intranet/Email/Field Bulletin
2. Materials: Tutorial Video, User Manual, Quick Reference Cards
§ On site training and demos with big producers throughout 2013
§ Dedicated eApp support team (Phone & Email)
36. 36
Advisor
• Deliver a more efficient way for our Salesforce to sell our products
• Implement an aggressive adoption plan to maximize return of
investment
Results
§ Positive feedback from AXA Advisors
1. iPad capability smooth and convenient
2. Electronic signatures flexible and intuitive
§ 5% adoption 1st month on track for 50% Year End
§ NIGO Rate reduced from 53% to 2% for eApp submissions
“It cut the entire process down
a week. I don’t have to travel to
get signatures or pay for
overnighting paperwork. “
-Travis Penfield (AXA Advisors)
“Game
changer”
“Can abandon
trunk full of
applications”
“As a new advisor and not being
quite as familiar with all of the
required forms, Annuity eApp
was a huge asset.”
-Kevin Kaplan (AXA
Advisors)
37. 37
Background – Back Office
E-Insurance
Strategies
§ 2011: AXA Equitable engaged Nolan to help streamline Document
Management Center (DMC) Operations in order to:
§ Streamline DMC functions (Prep, Scan, Mail) across enterprise
§ Leverage Digital Content (Email)
§ Consolidation
§ *Optical Character Recognition
§ Construction of a Digital Mailroom: Big Opportunity
38. 38
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Eliminate Waste
§ 2011 State Document Management:
Scan Verify
Open Sort Prep Scan Index DepositDeposit
§ Proposed “Optimal” State with OCR:
Open
39. 39
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Vendor Selection
§ Key Decision Factors
§ Company
§ Solution/Technology
§ Implementation/Integration
§ Proposal/Price
§ AXA Germany Solution
40. 40
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Insiders Technologies - smartFIX
41. 41
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Project Plan – Phased Approach
§ Consolidation implemented prior to OCR
§ Staggered rollout enterprise wide
§ Business area ramp up at each site (New Business, Inforce, etc.)
§ Project completed in 18 months
42. 42
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Challenges
§ Overlapping project resources
§ Integration with admin systems/workflow
§ Infrastructure (Fax Server)
§ Optimization Ramp Up
§ Change Management
43. 43
Back Office
• Streamline and standardize document management process and best
practice for consistent client experience
• Automate and digitize for increased efficiency
Results
§ Successful Implementation On Time & Budget
§ OCR Enterprise Support Team: Best Practice
§ Classification Rate: 55%; Straight Through Rate: 8%
§ 2013 Savings to be realized: $.75M/Annual
Still to come….
§ Optimization Ramp Up Savings: $1.8M/Annual
§ Classification Rate 85%; Straight Through Rate: 25%
44. 44
Digital Strategy at AXA Equitable
Expense Management
Customer Centricity
Digital
Solutions
Policyholder
Advisor
Back Office