When agents refer their clients to company call centers or Web sites directly, the valued business relationship between the consumer and the agent begins to erode.
Agency branded 24x7 service for independent insurance agents
By Richard H. Roy, Jr.
When agents refer their clients to company call centers or Web sites directly, the valued business relationship between the consumer and the agent begins to erode.
The next generation of insurance consumers is being raised with on-demand technology and 24x7 availability of product and service information. It is estimated that over $20 billion of insurance premium purchasing power now resides in grades 9 through 16. These new customers don't have any experiences other than 24x7 and they are entering the insurance marketplace every day.
As is often the case with a new and rapidly growing business practice, there are a growing number of definitions of 24x7 service. In an effort to bring focus to this, we suggest looking at service from the perspective of the ultimate consumer of this service, the policyholder.
Is 24x7 really 24x7? For most insurance agents, 24x7 means developing a method of handling service during hours the agency is currently closed. However, to meet the needs of the policyholder, 24x7 needs to be viewed in the full breadth of face-to-face services currently offered when the agency is physically open for business. We suggest that while agencies investigate how to handle after hours service, they also anticipate the possibilities that consumers will also want to utilize that same means to conduct business during an agency's normal business hours. (As an example, in the banking industry, many people use the ATMs even when tellers are available.)
What services should be extended to 24x7? As a start, non-licensed functions are the easiest services to extend to 24x7. Providing customers a means to view their insurance information and submit additional information or corrected information is a must. Service functions such as making requests to add, delete or modify coverages or risks, reporting losses and securing forms that reflect coverages that are currently in effect represent the minimum definition as to what makes up 24x7 service.
Why not licensed functions such as policy rate and issue? Based on an extensive set of focus groups and material from some national studies, we conclude that while technology can easily enable the traditional rate/issue/purchase of insurance after hours, it is the consensus of the customer community that they prefer the personal, professional relationship at the point of purchase. (A "trusted advisor" relationship.) This may change over time, but today it isn't a significant factor in extended services for the independent agent's customers.
What about billing and claims status information that traditionally is available directly from the insurance companies? This information needs to be made available to the consumers as well. Nearly half of the traditional service calls coming into an agent's office for personal lines insurance relate to billing and claims status inquiries. Companies are currently building the capability to service the insured directly over the Internet. However, those systems should be built so that an agency's customer can access that carrier information from the agency's agency branded 24x7 service solution.
"Agency branded 24x7 service" is provided by the agency and uses the agency logo and URLs, rather than a referral to another place, such as a carrier claims center or carrier URL. A consumer knows his or her agent. That's who the consumer does business with. The agent thus has "the brand" and can attract the consumer to the 24x7 service with that brand. Solutions should be displayed at and pushed from the agency's Web site or telephony instead of being linked to another location.
When agencies refer their clients to company call centers or Web sites directly, the valued business relationship between the consumer and the agent begins to erode. Suppose a consumer has an unpleasant or unfulfilled service experience at the insurance company call center and/or Web site. That reflects poorly on the agency as well as the carrier. If the agency maintains the information and manages how the consumer gets carrier-specific information, the agency controls the situation, just as agencies do today when inquiries are made during normal business hours.
Remember, just because there is a new business practice called 24x7, it does not, and should not, mean that agencies should alter how they conduct business in general. If an agency acts as an intermediary for its customers regarding direct bill and/or claims status inquiries during normal business hours, then the agency should make sure that the choice of after hours service enables the agency to replicate that business practice.
Also, an agency should make every effort to extend all general service practices to the after hours initiative. Customers should not have to wonder or remember which services are available when. The more seamless the experience is for the consumer, the higher the probability of a successful implementation and utilization.
There are three key require-ments for providing agency branded 24x7 service.
1) The agency. All roads relative to extended or after hours services should lead to the agency brand/logo in order for the insured to maintain his or her relationship with the agency. If an agency simply "pushes" its customers to carrier call centers or carrier Web sites, over time the insured will be less dependent on the agency. Maintain the relationship, provide the services and expand the consumer's dependency by maintaining a significant position in this evolving business practice.
2) Telephony. In this "Internet centric" world, we often downplay the most common means that an agency's customer uses to communicate with the agency, the telephone. The vast majority of agency customers will still reach for the phone to gain access to the agency after hours. This is due to several factors:
a. As much as we may think everyone is "on the Net," there is a significant portion of society that doesn't have access to the Net.
b. The social behavior of some consumers will always require telephone availability for after hours service. Many people are still Internet phobic; thus, without phone connectivity to 24x7 services, these individuals (who in a lot of cases are the long-standing customers of the agency), will not be able to take advantage of the extended service.
c. The circumstances that cause a policyholder to need after hours access may not be conducive to accessing the Internet. For instance, if a consumer just had an automobile accident, the consumer's immediate means of contacting the agency will most probably be a cell phone, not the Internet.
Any type of "after hours" or 24x7 type service that doesn't include telephone access that allows the policyholder to have the same after hours experience as those using the agency Web site will create a "two class system" for agency customers. And we're not just talking about telephone answering services, we're talking about the telephone personnel having access to the agency's insurance files so they can offer the policyholder the same services they could execute on the Internet, only utilizing the telephone. That means the telephony organization(s) must have technical access to the data. Those without access to the Internet will not get the same level of excellent service as those with access to the Internet.
3) Agency management system data. Agencies that have been diligently loading data into agency management systems have not been able to use the data for much more than day-to-day agency processing. But by having the data in the system already, agencies now have the means to launch agency branded 24x7 without needing additional information from other parties. Any approach to 24x7 that doesn't utilize the agency data will simply disintermediate the agency from the information its customers are obtaining.
How can 24x7 be accomplished economically?
The Internet. The Internet provides the place where all the parties to the 24x7 services can exist at an inexpensive rate. Using the Internet as a secure means for an agency to securely warehouse policy data without having to make the agency's entire system "Web public" is a significant hurdle cleared. The Internet also provides the following:
1) For agency customers, the Internet provides an open means of electronic communications that the consumer is typically already engaged in. There shouldn't be any additional expense for a consumer to get access to his or her policy information on the Internet other than the cost to be on the Internet itself.
2) Policy information can be securely "parked" on the Internet so that the agency's call center can sign on and offer the same level of service to the customer that the customer could obtain if he or she had access to the Internet, because the call center sees the same data that the consumer does.
3) Carriers are using the Internet as a means of linking their solutions to both the agency and the agency's customers. The Internet allows data, information, and products and services to be brought to the consumer as if it is being done by the agency itself, seamlessly. Because the Internet allows data from multiple places to be presented to a viewer as a single source, the agency must demand being that source as part of its focus on agency branded 24x7 service.
How is 24x7 service being offered today?
Although the concept of 24x7 is still in its infancy in the independent agency marketplace, there appear to be three primary models for addressing this issue:
Model 1
Many agency management system vendors have added, or will be adding, "client access" modules to their systems over the next several years. This will enable agencies to give their clients user ID codes and passwords to gain direct access to the agency's management system.
Pros
i. Agencies may feel more comfortable attempting to provide 24x7 service utilizing the management system vendor's customer access solution.
ii. The agency has one vendor to deal with for both management system and 24x7 technical issues.
iii. The management system vendor customer access solutions are integrated with the management system database for real time processing.
Cons
i. Agencies will need an Internet server if they don't already have one. This could cost between $5,000 and $15,000 depending on the size and power of the server required.
ii. Agencies will need the necessary firewalls and routers to enable their customers to gain access. This could cost an additional $2,000 - $3,500.
iii. Agencies will have to secure the necessary phone lines and office environment to run their server 24x7 without interruption.
iv. Agencies will have to deal with the concern of having their live data exposed to Internet access and potential viruses.
v. If an agency isn't running an Internet version of its agency management system, additional software may be required so the agency's customers are able to access the 24x7 service. (This is the case today with most major vendor platforms in use by independent agents.)
Since most of the agency management systems that agencies are using today were not built to run on the Internet but rather were retrofitted to be Internet enabled, agencies may be faced with increased costs so that customers can have increased access to agency data. Remember, many agency management systems are licensed by the number of ports or desktops and printers that are allowed to access the data. In an open Internet world where you don't know how many people may be wanting to access the data at any given point in time, systems that weren't built for Internet technologies may have to have more ports purchased to allow the consumer to access.
vi. Currently none of the agency management system vendors plans to offer telephone support for the agency's customers.
Model 2 (Most closely resembles a true agency branded 24x7.)
New vendors are bringing solutions to the marketplace that offer the 24x7 servicing in an ASP (application service provider, also known as a remote server farm) environment.
Pros
i. At a time convenient to the agency, a copy of its customer, policy, underwriting and coverage data for its in-force customers is electronically delivered to the ASP. This eliminates the agency's need to purchase equipment or worry about supporting a full 24x7 server in its office.
ii. By having a copy of the data on the Internet, agencies eliminate many of the virus and/or firewall issues associated with hosting live data access.
iii. Since agencies are not open for business during the majority of the time 24x7 service is in use, the data on the Net is current and up to date. (During regular business hours, CSRs and agency personnel are making changes to the policyholder records. Until those changes are updated on the agency's 24x7 ASP servers, the records are slightly out of sync. Since most agencies target 24x7 to be primarily after hours service, this hasn't been a problem so far.)
iv. Because the data is in a centralized location on the Net, telephone service can be easily offered to the agency's customers who want to use that means to access the after hours service. That telephone service is available by way of a call center--either one specifically used by the vendor, one that the agency uses or, in some cases, the carrier service centers that provide phone support for all policies, and is attached to the agency's data by security codes. Thus the customer signs on the agency's after hours data center and reviews the records just as if he or she were a CSR in the agency itself.
v. The agency's customers need no additional software other than a browser.
vi. Carriers can build access points to direct bill information or claims information in these environments and be able to handle most agency management systems without dealing with each vendor individually.
Cons
i. Today, this ASP approach is not real time with the agency management system. Today's solutions actually run off a copy of the agency's system, not the live system itself. So while perceived to be real time, it too is slightly out of sync with the agency's data.
ii. Agency personnel need to input information received overnight into the agency management system because at this point in time such information cannot be integrated with the management system.
Model 3
New vendors are attempting to provide limited functionality while professing to be a true 24x7 service.
Pros
i. Although many agents will look at these types of services and think that they represent a reasonable approach to "inching" into 24x7 services, current experience suggests that although it is better to offer something rather than nothing at all, consumers, once they gain access to 24x7, want to do much more than these limited services can provide.
Cons
i. In many instances the additional service desired relates to certificates of insurance. However, if an agency's customer can get online and process a certificate but can't report a claim, or see his or her coverages, or get an auto ID card, the overall service experience will still be disappointing.
Conversely, don't frustrate your customers by making them sign onto one system to do certificates, then sign off and onto another system to get direct bill information and so on.
ii. Many of the vendors in this category aren't using agency data. The data must be re-keyed into their systems. As an industry, we've spent decades re-keying. So 24x7 needs to optimize the investment agents have made putting data into their systems.
Summary
For agency branded 24x7 service to be truly successful, it must be driven by the following features, responsibilities and commitments:
The software solution:
1) It must be driven by the data in the agency's management system or the carrier systems under the agency brand, but it must be data driven.
2) It must be secured and protected.
3) It must allow the agency's customers to have access through the Internet without additional software.
4) It must allow the agency's customers the same access through the policyholder's use of a telephone.
5) It must provide an audit trail for all the transactions that the agency's customers process.
6) It must have an audit trail for the conversations that take place at the call centers between the call center and policyholder.
7) It must enable the call centers to identify your agency when dealing with your customers. "Hello, you've reached the ABC Insurance Agency after hours call center. How may I help you?"
8) It must enable all CSR level functions so the agency's customers can truly benefit from this service.
The vendor you contract with for 24x7:
1) The vendor must take responsi-bility for the E&O associated with any possible misrepresentation of your agency management system data to your customers.
2) The vendor must take responsi-bility for the E&O for viruses or security breaches particularly if the vendor is going to run "live" off your agency management system.
3) The vendor must commit to making its 24x7 service "open" so that other services you want to add later can interoperate without there needing to be negotiations with each vendor each time you want to add something for your customers.
The insurance carriers:
1) The insurance carriers must pro-vide a seamless hand off when an agen-cy customer needs data from the com-pany system, making sure the agency identity isn't lost in the transaction.
2) The carriers must provide client-friendly systems. Policyholders shouldn't have to sign on and off of multiple systems each time they need information that is available only on the company systems.
3) The carriers must return the customers to the agency's Web site when the transaction is complete, not simply provide a button to click.
4) The carriers must agree that they will not proactively market the customers while they're getting the data from the company mainframe.
The agency:
1) Agencies must be aggressive in promoting the 24x7 capability and getting their customers to use it.
Although only a few of your customers are ready to engage in 24x7 today, making it available to them will help prepare your agency for the evolving services of the years to come. Also, these initial customers for whom you provide this service should provide you with more than enough economical justification for the expense of purchasing the product(s) and services to provide 24x7. Today's experience will better prepare you for tomorrow's requirements. *
The author
Richard H. Roy, Jr., is chairman and CEO of idNET, Inc., a technology company that works exclusively with independent insurance agents. The idNET mission is to harness the Web and utilize it to expand agents' business opportunities.