The Key to Agent Automation: Knowing What Your Agent Needs

Keith Raymond

Keith Raymond

Automation that enhances the agent experience and ultimately their selling and service capabilities is fundamental to enabling their success. But with so many potential areas to focus on, from portals to licensing and contracting to mobile, it can be challenging to know what to prioritize. Here are some best practices to help CIOs and business partners focus attention on the most value-added elements of agent automation:

  • Know your agent: A successful agent is someone who puts the needs of their clients first, has a positive impact on the people and community in which they serve, and takes pride in being counted on by their clients. Knowing the motivations of an agent provides a good base for understanding where you can get the most value from your investments.
  • Create an inventory of opportunity: Given the complex array of systems that provide support for the agent, a significant step is creating an inventory. There are a mountain of touch points that leave a lasting impression for an agent.To fully realize areas of opportunity, CIOs and their teams should develop a process map covering the agent interactions with all the touch points during the course of a business day.
  • Define metrics for success: The measures of success are likely to be a combination of things like improving the efficiency of submission to commission process, straight-through processing, aggregating access via single sign-on, and reducing agent onboarding times. Whatever the ultimate metrics may be, the process of working with agents and business partners to develop the metrics helps bring all parties together.
  • Understand mobile use cases and value: Mobility for agents has grown beyond calendar and contacts to more of a full agent “mobile office.” Depending on the use case, agents may be looking to access all of their data and applications from any device from anywhere at any time. A well thought-out and well executed IT strategy can support mobile applications by leveraging an open, service-oriented architecture.
  • Consider the impact of emerging technology: For most carriers, using today’s widely available digital technology and approaches will have the most immediate value in agent automation. But there are several emerging technologies, like gamification and wearables, whose potential values should be considered for inclusion on carriers’ roadmaps for the next few years.

Agents are heavily dependent on automation for every aspect of the engagement and service functions that support the ability and sell and service a client. The more CIOs can enable them through technology and process simplicity, the easier it is for them to do what they do best: develop relationships and provide peace of mind.

For more on this topic, see my recent CIO Checklist report: http://novarica.com/agent-automation/

Lemonade’s and Haven Life’s Limited Launch Approach Provides Lessons for Incumbent Insurers

Tom Benton

Recently, innovation-focused startup insurers Lemonade and Haven Life both announced expansion beyond their initial states–Lemonade to all but 3 states and Haven Life adding five states and D.C., leaving only California and Montana to add. Both initially launched in limited states (33 for Haven and just New York for Lemonade). Add to this the announcement this week that Ladder has launched in its first market, California. The limited launch approach allows these companies to gather customer data and make the necessary process changes that will be critical to their data-driven approaches going forward.

As these insurance startups build their policy counts, more customer data will be accumulated that will provide better algorithm results. But, scaling up in size will offer different challenges for these “Creative Carriers”. Lemonade faces a transition of showing profitability while continuing to innovate, and Haven Life, backed by Mass Mutual, may face different pressures as they grow. In both cases, customers will continue to expect these startups to continue being innovative in how they approach customer experience.

Lemonade’s approach is centered on transparency to build trust. According to this recent blog post, they intend to soon release information on performance metrics and the impact of their ‘Giveback’ program (in which the company donates leftover money form premiums to causes customers choose). This is consistent with their focus on changing the industry by changing the dynamics of interaction based on behavioral economics principles infused in the organization by Chief Behavioral Officer Dan Ariely.

Haven Life on the other hand stays focused on creating the simplest and fastest possible experience–what they refer to as their “ridiculously easy process” for buying life insurance. Their value proposition also includes transparency, but more by providing a fast quote and enabling easy comparison price shopping.

With their expansion into new state markets, the continuing growth and adjustments at both of these innovators will be important for incumbent insurers and imitators to watch throughout 2017.

Grange’s Bet on Amazon Shows Importance of Building Flexible Core Systems

Jeff Goldberg

The major tech players are all betting that smart home automation and digital assistants will be the next big thing for consumers. Grange is taking advantage of this emerging area with their recent announcement that Amazon’s voice-controlled Alexa can now help users learn about Grange insurance or find local agents. It’s clear that the insurance marketplace has not always adapted quickly to improve the customer experience, so this is a great example of an insurer working to serve consumers in whatever way they prefer. It also demonstrates the necessity for insurers to think to the future when they modernize their back-end systems. Will a new core system support future channels? Over the last five to ten years insurers have poured a lot of time and money into building web-based consumer portals. Those that didn’t build for future flexibility had to start from scratch in order to create mobile-ready sites. Will they have to begin again to leverage voice-based home assistants or some as-of-yet unknown customer interaction? Insurers who are thinking in an omni-channel way will instead be architecting agile back-end systems that can support any number of channels and–just as importantly–can support transfers between channels when necessary.

UnitedHealthcare Motion Provides Model for Faster Adoption of Wearables

Tom Benton

The potential for wearables in health and life insurance has been hindered over the past few years by lack of standards and slowing adoption by consumers. This week, UnitedHealthcare and Qualcomm announced they have “enhanced and expanded” the employee wellness program UnitedHealthcare Motion. UnitedHealthcare Motion is making progress in wearables use for wellness programs by leveraging the advantages of using the Qualcomm 2net platform, a medical-grade cloud-based infrastructure for medical device applications, with enhanced security and flexibility provided by standardization of end-to-end connectivity for wearables. The ability to quickly integrate in the Fitbit Charge 2, first shipped to consumers in mid-September 2016, shows the advantage of a standard platform that can respond to changing consumer demands and device capabilities. As mentioned in Novarica’s report on “Internet of Things, Wearables and Insurance Customer Experience”, security and standardization as seen with the UnitedHealthcare Motion BYOD capability will enable faster adoption of wearables for use by insurers to improve customer experience.

J.D. Power Study Shows Digital is About Customer Service, Not Just Cost-Saving

Chuck Ruzicka

In today’s environment where retention is critical, the quality of a carrier’s claims service and handling is a major source of competitive advantage. Other than the bill, claims are often the only contact that a customer may have with an insurance company. A new study from J.D. Power found that while the majority of claimants would prefer to check the status of their claims online, consumers would also like the option to call a representative for first notice of loss. This study highlights that digital service is a complement to call-center service, not a replacement for it. Early business strategies around what used to be called e-business focused on the cost savings of “self-service.” But digital is about engaging customers where they are, not pushing them to lower-cost channels.

News and Views: Renters Insurance, Defined Contribution M&A, Reinsurance, Startup Activity

Novarica’s team comments on recent insurance and technology news

Bungalow offers a simplified platform for purchasing renters’ insurance

Jeff Goldberg

Novarica comment by Jeff Goldberg, VP of Research and Consulting: “The founders of Bungalow, being Millennials themselves, are well placed to sell insurance to their peers. They have begun by understanding the kind of experience Millennials want, based on simplicity and ease of use, and molding the insurance buying experience to these priorities. This story shows that disruption, especially distribution disruption, can and will emerge from within the insurance industry. Even if tech companies don’t figure out how to handle insurance licensing, there will be people within insurance who understand and respond to the consumer desire for a kind of customer experience traditional carriers are not providing.” For more on Millennials and insurance, check out our new report on the subject.

Ameritas Finalized its deal to acquire Guardian’s 401(k) plans business

Rob McIsaac

Novarica comment by Rob McIsaac, Senior VP of Research and Consulting: “In our upcoming Business & Technology Trends report on the Defined Contribution Retirement Plan business, we highlight the degree of competition carriers face, as well as the significant cost pressure they find themselves under. Last week’s announcement that Ameritas is purchasing Guardian’s 401k business is the most recent example of a carrier choosing to exit this market because they could not attain the required scale. The M&A route allows both companies to achieve something important for their own longer term strategies; we fully expect to see more of this activity in the coming year as carriers look to better position themselves for long term profitability.”

DropIn’s video streaming service has the potential to significantly reduce the cost and labor associated with the claims process.

Chuck Ruzicka

Novarica commentary by Chuck Ruzicka, VP of Research and Consulting: “Not all emerging tech poses a disruptive threat to insurers. DropIn, a recently launched startup, could significantly reduce claims processing costs and time. DropIn’s service is just one example of the type of value that startups can provide to the industry. Although this company didn’t incubate in an insurer accelerator or receive funding from a carrier, it offers insurers an innovative solution to a problem that has plagued the insurance industry. Outside entrants aren’t always a threat, and keeping a finger on the pulse of the startup community can work to the advantage of the industry.” More from Novarica on how startups and insurers can work together.

The market continues to be tough for reinsurers.

Matthew Josefowicz

Novarica comment by Matthew Josefowicz, President and CEO: “AM Best’s report on tough times in the reinsurance market is encapsulated by this simple quote: “low investment yields, and continued pressure from convergence capital.” As I wrote recently on LinkedIn, disruption is not just about distribution. The capital markets are realizing there’s nothing stopping them from pricing and selling risk coverage directly. Like primary insurers, reinsurers will need to think about other ways to monetize their distinctive knowledge of risk, since the loss reimbursement market is under pressure.” More from Novarica on reinsurance.

Tesla has entered the auto insurance business.

Jeff Goldberg

Novarica comment by Jeff Goldberg, VP of Research and Consulting: “Tesla, a company whose main business is manufacturing electric cars, is launching an auto insurance program business to serve their customers. This program is a response to a perceived gap between the consumer need for an innovative, flexible auto insurance product that will cover an automobile whose properties can be changed almost at will by the owner, and the inflexible coverages offered by traditional auto insurance. In the future, consumer demand will mean more insurance products are bundled with a broader offering and experience. Either insurers will actively partner with third-parties to create these offerings or those third-parties will control the entire customer experience and relegate the insurer to the back-end risk holder.”

Operational Transparency, Agile, and Perceived Value

Matthew Josefowicz

Our guest keynote speaker at the recent Novarica Insurance Technology Research Council Meeting was professor Ryan Buell of Harvard Business School, who presented some of his recent research on operational transparency and its impact on customer service.

Transparency Changes Perceptions

The main finding of Dr. Buell’s research is that service providers perform better when they see the impact that their work has on customers, and that customers are more appreciative and feel better served when they see the work that has gone into providing services to them.

Here’s a video of Dr. Buell presenting on this topic as it relates to government services, from his website:



I invited Dr. Buell to join us after encountering his research online, and realizing how important this topic was not just for insurance customers, but for the internal customers of insurance IT leaders.

Insurance is an opaque product

For customers, insurance is an invisible and mysterious product. Few customers know what goes into underwriting and issuing a policy or processing a claim. Even for distributors, a major source of frustration is not understanding when or how decisions are being made. Some insurers have found that simple process additions like progress bars, proactive process notifications, or simple explanations can have an impact on customer and agent satisfaction levels.

IT is also an opaque product

IT is an equally opaque product to its internal customers. Leaders and staff in other business units generally have a poor understanding of IT, why things that seem simple are complex, how long tasks actually take, and generally just what the heck those technology guys are doing all day. This lack of understanding and lack of transparency leads to frustration and turns other business executives towards trying to manage IT with the only tool they do understand: budgets. This rarely leads to value creation.

For IT, Agile is helping

With the mass adoption of Agile development by insurers, this is starting to change. One of the main benefits of Agile is enforcing regular communication and review of progress between technology staff and other business units.

As shown below, the majority of insurers report that this is improving end-user satisfaction with delivered products, relations between IT and other business units, and even IT job satisfaction.

Slide22

Through frequent interactions and reviews, other business units feel greater ownership in IT projects, and IT feels like it’s making a difference in achieving overall business goals.

Future collaboration

We believe that insurers can benefit from an operational transparency orientation in multiple areas, and we’re currently in discussion with Dr. Buell about future collaboration and activities with our team and Novarica Research Council members. Contact me if you’re interested in learning more.

Related Research

  • Novarica Nine Insurance Technology Trends and Issues for 2016
  • Agile at Insurers 2015
  • These are not the droids you’re looking for…

    Matthew Josefowicz

    According to FinTech marketers, the “robots” are coming. Robo-Advisors will help clients optimize their investments, and Robotic Automation will remove cost from cumbersome back-end processes.

    But we’re not talking about C-3PO working in a call center. Robo-Advisors means improved analytics, better customer self-service, and automated rebalancing of portfolios to align with pre-set customer goals or company-determined algorithms. Robotic Automation means using screen scraping, rules engines, machine learning, and scripting to integrate poorly automated processes without re-engineering client-based software.

    All of which is fine, but using the term “robots” to describe it just makes it harder for customers and executives to understand what’s really going on.

    Notably, the biggest “Robo-Advisor” firms don’t use that term in their marketing. They know it doesn’t have anything to do with customer benefits, it just describes their delivery methodology. Services firms that offer Robotic Automation should follow their lead. Like the insurers they serve, services providers need to change their mindset and think Outside-In.

    For Life Insurers, the First Step is Admitting there is a Problem (in this case, with Customer Experience)

    Rob McIsaac

    I had a chance to speak at the recent North Carolina CEO summit and one of the key takeaways was that one of the hardest things for companies in any industry to do is adjust their business processes to reflect appropriately on the challenges and opportunities made possible by new technology and changing consumer expectations. This is especially true in insurance. The majority of carriers have perfected looking at the world from the inside out, which may be fine in an era of limited change, but it is exactly the wrong response in a period of dynamic activity and shifting expectations, punctuated by the threat of new market entrants.

    This inside out thinking leads companies to focus on service-level agreements and other metrics which completely miss the importance of getting the actual customer experience right. Companies may well understand the correlation between poor customer experiences and financial outcomes (e.g., poor persistency rates or a failure to loss of assets under management), but they seem to fail routinely in understanding what the root cause events are driving these results.

    A personal customer experience with business as usual

    As a case in point, I recently went through a series of unfortunate customer service events with a large, national, life insurance carrier. The start came through a phone call to one of their support centers. This particular facility was in Ireland and their function was limited to letting callers know that the company was closed in the evening and would be open during “normal business hours”. Of course, “normal business hours” turns out to be the same hours when most consumers are at work, making it remarkably inconvenient. On the next day, a call during normal business hours and was routed to a call center in Manila. After almost an hour on the phone I discovered that this operation was only able to deal with non-registered products; that issue wasn’t picked up by the VRU when I dialed in. Once we got past that confusion, the call was routed to another call center in the Midwestern United States. At that point, a knowledgeable representative walked through the issue but concluded that since the transaction spanned multiple internal business units there was nothing he could do. The best response was to have an agent call me. The SLA for a call was 24 to 72 hours.

    The empowered customer finds an alternative

    Two weeks later, when no call came, I gave up and went looking for an alternative company to manage the assets. The multiple contracts involved were 30 years old, so this was not a new customer issue. It was however a life event issue which a new financial institution was happy to address. In this case, the company in question was a brokerage firm who happens to sell life and annuity products on behalf of a range of manufacturers. They were happy to set up the new accounts and handle the 1035 exchanges and had the experience wired before the original life carrier understood what had happened.

    So, from a customer standpoint, I was quite happy. I was able to move the funds into an experience where there was a knowledgeable entity on the other end of the wire; the account opening experience was very Amazon-like, inasmuch as routine updates on the status of the transactions came to me in my preferred channel of communication.

    Too little, too late

    That might’ve been the end of the story except that the life carrier now seemed spurred into action. However, the action invoked processes that are little exercised and had unintended consequences. For example, multiple conservation letters were received offering to discuss options for keeping assets at the original carrier. Unfortunately, the conservation letters arrived after the proceeds had already been distributed to the new financial services company. Another bit of detective work found that the time lapse between producing (and dating) the letters and their actual delivery was 10 days. Based on the postmark, it was six days between the production of the letters and having them sent. They came via a bulk mail rate resulting in further delay.

    The operation was successful, but the patient died

    Through this whole effort, it is possible that the service-level agreements for every component in the process were met. The whole of the experience was very different than the sum of those parts, however.

    Fixing this kind of problem doesn’t need to be particularly difficult or expensive. It does require, however, the recognition that there is a problem. One approach that we see taking hold now is the introduction of the position of Chief Customer Experience Officer. Frequently coming from outside of the insurance industry, from banking or consumer products, the individuals taking these roles have a charge to look at the carriers “from the outside in”. This is a promising development that many more carriers should consider as they kick off 2016.

    To discuss this topic further, please contact Rob McIsaac at rmcisaac@novarica.com

    The Importance of Modern Insurance Billing

    Martina Conlon

    While billing is an area that tends to get attention only when something goes wrong, it is a critical part of insurers’ agent service and customer-service strategies. Billing presents an opportunity to fulfill a brand promise of convenience and trust. It is the primary opportunity that insurers have to interact with their best customers, and errors can be costly. Most insurers are starting to see billing for what it is: a key customer service function (rather than a purely financial function). Many insurers find that legacy billing technology limits efficiency for internal operations, effectiveness of customer service, the speed to market for new or modified billing features, and can be an obstacle in delivering capability to agents and policyholders.

    A modern, configurable billing system with strong rules, tools, and workflow capabilities can address these issues and provide:

    • Improved time to market for new products with creative billing options
    • Improved customer service levels
    • Improved customer satisfaction
    • Improved agent satisfaction
    • Increased operational efficiency
    • Improved consistency in process
    • More personalized customer experience
    • Improved cash management
    • Better identification and management of delinquencies
    • Clear audit trail of activities
    • Faster ability to train new employees

    In Novarica’s most recent study on budgets and projects for insurer CIOs, more than 40% of companies were planning to engage in replacements or major enhancements to their billing systems.

    Insurers Plans for Billing in 2015

    Insurers Plans for Billing in 2015

    In a world of growing business expectations, carriers must see billing as a way to meet, if not exceed, their customers’ assumptions. With this in mind, Novarica has just released two new reports on billing to help get insurers up to speed on the latest technologies and trends.

    Novarica Market Navigator: US Property/Casualty Billing is 83 pages long and includes similar detailed profiles of solutions from Accenture, CSC, Decision Research Corp, EIS Group, Guidewire, Insuresoft, Insurity, Majesco, MphasiS-Wyde, OneShield, SAP, SpeedBuilder Systems, and StoneRiver. The report is available to Novarica clients and for purchase online at: http://novarica.com/nmn_pc_billing_2015/

    Business and Technology Trends: Billing provides an overview of business and technology issues, data about the marketplace and 16 examples of recent technology investments in billing issues. The report is available to Novarica clients and for purchase online at: http://novarica.com/business-and-technology-trends-billing/

    The impact of investing in new billing solutions will be significant as insurers look to digitally transform themselves in the years ahead. For more information about the latest billing trends and solutions, register my upcoming Trends in P/C Billing webinar, on Tuesday, August 18th at 2 pm (ET).