Tag Archives: customer service

Insurance Service Rates Zero Stars

When we say marketing 3.0, industry 4.0 and technology 5.0, we all get used to cool names ending with zero. I think no one is surprised that insurers fell a little bit behind.

We all talk about these cool zeros, but there is something really zero in insurance: customer service. I’m not talking about a claim service or a specific customer relations problem. I mean the view of insurers’ whole customer service.

Most insurance companies think that they should only serve for the customer who has a claim. Their favorite customers are the policy owners who haven’t had any claims for years. But the insurance industry’s approach doesn’t match with the fundamental dynamics of the service sector. As a service company, if you are getting a fee from customers, you should be happy while serving them and should want to make your customers happy, too.

See also: Next Generation of Insurance Services  

Insurance companies need to remember that they are in the service business. Serving only the unfortunate winners (claim owners) does not make you a services provider, but makes you a lottery company, at best. Lottery companies do not have problems because the majority of ticket owners know that the chance of winning a lottery is very low and don’t expect any special service from the lottery company. But people buy insurance against bad events that they think are likely to happen, and, if these events do not happen, they feel they do not get their money’s worth. Therefore, it is necessary for all insurance companies to provide service to all of their customers during the policy period, even if they have not made any claims.

Think about the gym that you paid hundreds of dollars for a year and you have not visited for nine months. Probably, you are angry with the gym. After a year without any claims, an average policy owner has similar thoughts about the insurer. How can you handle this problem?

Let’s go back to the gym you have not visited for months. What if it provides you another kind of service that you can use remotely, like healthy nutrition consultancy or a one-year free Netflix subscription? The Netflix subscription could completely eliminate the possibility of your gym use, of course. 🙂 But, joking aside, what would you think about the gym? Surely, you would find it more sympathetic and might think your money is not wasted.

Six years ago, when I was working at Cigna Turkey, we had created a concept called “living insurance” to make life insurance more desirable. We bundled lifestyle services with insurance products by means of different concepts like family, education and healthy life. Normally, no one wants to think about the possible return on their life insurance policy; it’s an unpleasant topic. However, with the service we provided to our customers — from carpet cleaning to skin care, car check-up to pedagogical consultancy — our product became something more than just the consolation of bad luck. In this way, products became more attractive, and customers did not think that their money was wasted. They could benefit from services any time during the policy, even if they had no claims.

Of course, it was easier said than done. Some conservative executives strictly stood against the strategy. Some raised questions like, “What is the relation between these services and our policies?” Now, when I look back, I can easily say we have been successful. These products sold hundreds of thousands in a few years, and some of them are still the best sellers. In addition to creating a new product category in the market, we opened a way for these lifestyle services, which are now an industry standard; today, almost all life insurance companies in the market provide these kinds of additional benefits.

See also: How to Use AI in Customer Service  

Insurance companies are obligated to serve their customers throughout the whole duration of the policy, whether it is home, car or life insurance. By giving names to our customers as “insured” or “insurant,” we forget that they are actually customers with needs and expectations. To catch up with industry 4.0 or technology 5.0, insurance companies should focus on holistic customer service development before the big infrastructure transformation development projects. In this way, an insurance service 1.0 that represents a customer service concept that meets customers’ expectations may be possible.

How to Use AI in Customer Service

How to manage the increase in incoming unstructured information is a key challenge in the insurance industry—we explore how Accenture’s Machine Learning Text Analyzer can achieve this using historical data.

How do you approach customer service and policy administration within your organization? In this blog post, I’ll demonstrate how artificial intelligence (AI) and a raised AIQ can help you get the most out of your data. (For the other articles in this series, click here.) To do this, I’ll discuss how insurers can use machine learning to analyze texts.

How can insurers use AI in customer service and policy administration?

The customer service and policy administration workforce can make their lives easier by using AI to:

  • Understand and act on external emails and requests.
  • Automate call center and webchat services—helping companies get on with more intricate work.
  • Enable self-service queries on policy issuance, endorsements, cancellations and renewals—using virtual assistants, for example.
  • Process unstructured data, which means fewer mistakes and better customer service.

How does AI improve customer services and policy administration?

AI enables more efficient administration processes. Insurance executives plan to invest in seven AI-related technologies in the next three years. They are: 

  • Machine learning; 
  • Deep learning; 
  • Natural language processing; 
  • Video analytics; 
  • Embedded AI solutions; 
  • Robotic process automation; 
  • Computer vision. 

See also: Policy Administration: Ripe for Modernizing  

In addition to increasing the efficiency of administration processes and enhancing analytical insights, AI technologies also benefit customer services through:

As I will show in the use case below, the customer service and policy administration workforce can use machine learning to process information faster and with greater accuracy.

Use case: Machine Learning Text Analyzer (MALTA)

Insurers today must figure out how to manage the exponential increase in incoming unstructured data. Eighty percent of data generated is unstructured, and the volume continues to grow exponentially. Forty percent of business executives complain that they have too much unstructured text data and don’t know how to interpret it.

Insurers face three main challenges:

1. Too much unstructured information

  • A large amount of information comes in through a variety of channels;
  • Incoming data is structured as well as unstructured;
  • Much of the workforce is occupied with processing unstructured information;
  • A large amount of unstructured information exists within the organization.

2. Too many communication channels

Customers use a large variety of channels to communicate with their insurance company, such as e-mail, contact forms, the service desk (e.g. ticketing), letters and applications.

3. The information is not linked to business processes

  • Workers lose a lot of time when they have to identify received information and allocate requests to the right channels;
  • They also lose time owing to inefficient processes caused by breaks in the system;
  • This prolongs the response time to clients;
  • Humans are prone to errors, which creep in at all points.

Solution: Machine Learning Text Analyzer (MALTA)

Now, insurers can automate the analysis and classification of incoming text by applying machine learning and using historical data.

How does MALTA work in customer service and policy administration?

MALTA can analyze any incoming documents, for example when customers send their policy documents via email.

These documents can be analyzed and classified using natural language processing methods and machine learning algorithms. MALTA is also trained with historical data, which enables it to classify, understand and extract information.

In the next step, MALTA links your customer’s policy document to business processes, prompting different functions to take action. Depending on the business and architecture set-up, MALTA or the output of the API triggers a process chain, a robot or an agent so that the necessary processing steps can be executed.

See also: In Age of Disruption, What Is Insurance?  

Benefits of MALTA

MALTA is flexible, customizable, independent, multilingual, state-of-the-art and end-to-end; using Accenture’s machine learning text analyzer, insurers can:

  • Increase classification accuracy and efficiency, and reduce errors.
  • Create individual learning models based on training data.
  • Deploy the solution on-premise, not only in the cloud.
  • Automate repetitive tasks, allowing employees to focus on more complex work.
  • Categorize new requests immediately and send them to the relevant departments.
  • Use state-of-the-art models and tools.
  • Work on a platform-independent web service.
  • Carry out classification outside regular business hours.
  • Cleanse data and extract and evaluate features.
  • Link robotics and process automation tools to classification.
  • Set up and train employees with minimal effort.

In addition to customer services and policy administration, insurers can use MALTA across other parts of the enterprise, for example:

Are you ready to power up your business with AI? Download the report on How to boost your AIQ for more insight.

Building a Customer-Service Culture

First, let me say that I don’t make a habit out of staying at Ritz-Carlton hotels. But I have had occasion perhaps a dozen or more times to stay at a Ritz while attending a conference. I’ll have to say that, not only did I never experience a problem, but, without exception, each stay was an exercise in indulgence. I’ve also experienced several outstanding displays of excellence in customer service.

On one occasion, I was preparing for a workshop and realized that I had forgotten my overhead markers. Stepping into the hallway outside the meeting room, I asked a housekeeper who was dusting ashtrays (really) if she knew how I could get in touch with the A/V people. In many other hotels, I’ve been lucky to get a shrug or Freddie Prinze-ish, “That’s not my job, man.”

Not at the Ritz. The lady insisted on tracking down the markers herself (my program was scheduled to begin in minutes) and, remarkably (no pun intended), she returned with a new, unopened pack of markers within five minutes. She had been taught that SHE “owns” any request by a hotel guest.

On another occasion, I was convinced there was a shortcut to a meeting room on the second floor (where my sleeping room was located), so I wouldn’t have to go down and through the lobby, then back up some stairs to the second floor again. I stopped and asked a guy who was painting some trimwork if he knew how to get to the room. It would have been easy for him to say he didn’t know, but this guy laid down his brushes and escorted me through a maze of corridors to the meeting room. What this gentleman did is the rule, not the exception, at a Ritz-Carlton hotel.

If you’ve ever stayed at a Ritz-Carlton hotel, I’m betting that your experience was outstanding, too. (In an independent survey, 99% of Ritz-Carlton guests said they were satisfied with their experience, with more than 80% “extremely satisfied.”) How can they do it so much better than most hotel chains? Yes, you do pay a premium for their services, so we can attribute some of this to a larger budget. But, for the most part, the Ritz does it by creating a corporate culture almost solely devoted to serving the customer. If you spend the night at a Ritz, chances are the person making your bed received more training than you did getting licensed!

EVERY Ritz-Carlton employee receives a minimum of 120 hours of customer service training. That’s THREE WEEKS or more of training devoted to one discipline. Most first-year employees receive 250-300 hours of total training. How many of your CSRs have received 120-300 hours of any kind of training? This type of commitment to service and training pays off by allowing the Ritz to charge significantly higher rates for rooms and facilities while developing a clientele that is fiercely loyal. Many people WILL pay more for greater quality and service…the kind of people most businesses would want as long-term customers.

See also: How to Enhance Customer Service  

The Ritz-Carlton, at the time this article was originally drafted, is the only hotel chain to receive the coveted Malcolm Baldrige National Quality Award and the only two-time winner (1992 and 1999) in the service category. In a study by Cornell and McGill universities, the Ritz was selected “Overall Best Practices Champion” from a field of 3,528 nominees.

Let’s take a look at some of the foundational principles of the Ritz:

The Ritz-Carlton Motto:

“We Are Ladies and Gentlemen Serving Ladies and Gentlemen.”

The Ritz-Carlton Three Steps of Service:

  1. A warm and sincere greeting. Use the guest’s name, if and when possible.
  2. Anticipation and compliance with guest needs.
  3. Fond farewell. Give them a warm good-bye and use their names, if and when possible.

The Ritz-Carlton Credo:

The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

We pledge to provide the finest personal service and facilities for our guests, who will always enjoy a warm, relaxed yet refined ambiance.

The Ritz-Carlton experience enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of our guests.

The Ritz-Carlton Basics:

  1. The Credo will be known, owned and energized by all employees.
  2. Our motto is: “We are Ladies and Gentlemen serving Ladies and Gentlemen.” Practice teamwork and “lateral service” to create a positive work environment.
  3. The three steps of service shall be practiced by all employees.
  4. All employees will successfully complete Training Certification to ensure they understand how to perform to The Ritz-Carlton standards in their position.
  5. Each employee will understand their work area and Hotel goals as established in each strategic plan.
  6. All employees will know the needs of their internal and external customers (guests and employees) so that we may deliver the products and services they expect. Use guest preference pads to record specific needs.
  7. Each employee will continuously identify defects throughout the Hotel.
  8. Any employee who receives a customer complaint “owns” the complaint.
  9. Instant guest pacification will be ensured by all. React quickly to correct the problem immediately. Follow up with a telephone call within 20 minutes to verify the problem has been resolved to the customer’s satisfaction. Do everything you possibly can to never lose a guest.
  10. Guest incident action forms are used to record and communicate every incident of guest dissatisfaction. Every employee is empowered to resolve the problem and to prevent a repeat occurrence.
  11. Uncompromising levels of cleanliness are the responsibility of every employee.
  12. “Smile – We are on stage.” Always maintain positive eye contact. Use the proper vocabulary with our guests (Use words like – “Good morning,” “Certainly,” “I’ll be happy to” and “My pleasure”).
  13. Be an ambassador of your Hotel in and outside of the work place. Always talk positively. No negative comments.
  14. Escort guests rather than pointing out directions to another area of the Hotel.
  15. Be knowledgeable of Hotel information (hours of operation, etc.) to answer guest inquiries. Always recommend the Hotel’s retail and food and beverage outlets prior to outside facilities.
  16. Use proper telephone etiquette. Answer within three rings and with a “smile.” When necessary, ask the caller, “May I place you on hold?” Do not screen calls. Eliminate all transfers when possible.
  17. Uniforms are to be immaculate. Wear proper and safe footwear (clean and polished) and your correct name tag. Take pride and care in your personal appearance (adhering to all grooming standards).
  18. Ensure all employees know their roles during emergency situations and are aware of fire and life safety response processes.
  19. Notify your supervisor immediately of hazards, injuries, equipment or assistance that you need. Practice energy conservation and proper maintenance and repair of Hotel property and equipment.
  20. Protecting the assets of a Ritz-Carlton Hotel is the responsibility of every employee.

How to Enhance Customer Service

Many insurers — especially regional players with deep ties to their local community — stress that customer service is a key differentiator for their business. Novarica’s position has always been that customer service and technology are not tangential, but rather they are one and the same: having quick access to agent and policyholder data, quoting and binding in real-time, and generating recommended contact opportunities are examples of the kinds of technology-enabled capabilities that take customer service to the next level.

But key to providing great customer service is recognizing how customer expectations have changed in the last decade. Insurers must be ready to engage with consumers when and how they want across multiple channels for engagement. This has put considerable pressure on the insurance industry to figure out how to model themselves after other tech-driven industries in an affordable and scalable way. In the last year, chatbots have emerged as a viable option due to their ability to enable rapid customer service across a variety of low-touch applications 24/7. Moreover, chatbots are able to provide an added layer of support and consumer engagement without the need for additional staffing, freeing up human resources for higher-level tasks.

See also: Chatbots and the Future of Interaction  

Insurance use cases for chatbots include first notice of loss (FNOL), claims self-service, customer policy applications, policy endorsements and support, and agent interaction. These are great opportunities, not to replace other modes of interaction, but to supplement them for off-hours or for consumers who prefer a chat over a phone call. But chatbots are only as useful as the existing back-end functionality that supports them, and insurers can’t slap a chatbot interaction into their website or mobile app if they don’t also enable their core systems to provide real-time status updates or quotes via a web service. Just because a chatbot understands a user’s question doesn’t mean it can respond if the information isn’t available via machine, and an unsatisfying chatbot interaction is worse than none at all. The quick evolution of chatbot technology is a great option for a new channel, but it doesn’t let insurers off the hook to modernize and service-enable their entire infrastructure.

Moreover, as discussed in a recent blog post on Progressive’s new chatbot, Flo, insurers need to understand appropriate use cases for chatbots: while some self-service functions are ripe for chatbot usage, others may require empathy that an algorithm can’t provide. The submission of a claim is often triggered by a traumatic life event for the consumer, such as a car crash or illness, instances calling for a human touch. For this reason, it is unlikely chatbots can completely replace human agents capable of offering empathy and reassurance to their customers during heightened emotional crises.

As with any emerging technology, insurers should have specific, targeted use cases in mind for their initial implementations. Even if the end goal is to have chatbots available across all modes of support and service, such strategic projects start best with tactical investments.

For more on this, see my recent brief, Chatbots in Insurance: Overview and Prominent Providers.

The Customer Service Dichotomy

Customer service is rapidly shifting to self-service, digital, and mobile, with the next wave including chatbots, natural language processing, and AI/machine learning. This new era of customer service promises to be more efficient, more effective, and even fun in some cases. And from a customer perspective, the opportunity to save time and ensure accuracy is a big benefit. For insurers, the potential to optimize resources and reduce expenses is a major driver of activity in this area. However, before we rush headlong into these new customer service options, it might be beneficial to take a look at the reality of technology-based customer interactions today.

Most of us have already benefited from digital, mobile self-service, but have also been victims of tech gone wrong. At a recent panel discussion at the SMA Summit, Helen Thompson from ESRI noted the frustration we have all experienced in dealing with interactive voice response systems (IVR), as we struggle to work through the options tree and ultimately end up shouting at the phone “REPRESENTATIVE” in a vain attempt to connect to a Live Human.

See also: Much Higher Bar for Customer Service 

Another recent encounter I had with self-service is painfully demonstrative. My plan to cancel a subscription for an online magazine that cost about $8 per month took 3 phone calls, the filling out of two web forms, and waiting for a chat session that never happened. In the end, my only recourse (suggested by the one real person I talked to) was to block the transaction through my credit card company. What should have been a simple cancellation turned into a 45-minute ordeal.

I could go on citing examples, like my car’s Bluetooth that continuously fails to recognize simple, familiar names when I request it to dial and, instead, launches calls to random individuals. I’m certain that you can think of your own experiences and interactions via chat sessions, IVR, or online web forms that were less than satisfactory.

What does this mean for insurance customer service? I believe there are two primary implications for our industry. First, there will be a role for humans for a long time, whether it is for agents, contact center representatives, field adjusters, or other professionals. This is not to suggest that insurers and insurance professionals should be complacent. On the contrary, it is vital that new technology options are understood and adopted to augment human capabilities. The agent, adjuster, and contact center rep of the future will look very different than they do today.

Second, insurers must move toward a true omni-channel environment. There will be multiple ways to communicate with agents, prospects, and policyholders, including many digital and human interaction options. The challenge (and opportunity) is to enable the smooth transfer of those interactions and the related information between the different channels in real time, so that the customer is provided with choice, and the use of digital and human capabilities can be optimized.

See also: Life Is a Bowl of… Customer Analytics  

Right now, there appears to be a dichotomy with a wide gulf between the potential and the reality of automated customer service. But the shortcomings of the technology today should not result in insurers ignoring the potential. The best way to create an omni-channel environment that offers and delivers customer service that suits every customer is to move forward now.

One final note – great customer service will always be a function of culture. Whether an insurer is delivering customer service through bots or people, through digital means or a variety of human interactions, the secret sauce behind superior customer service will be the commitment to customers and a passion for excellence.