Better Service Without Hiring Extra Staff

The Canadian property and casualty industry is faced with a mature market with little ‘organic’ growth (growth from customers new to the market).

As reported earlier this year in the 2008 Q1 MSA/Baron Outlook Report, overall the industry experienced a 25% drop in net income in 2008 Q1 over 2007 Q1, from Cdn$903 million to Cdn$677 million. Given modest growth projected for 2008, and a stable work staff that receives salary increases averaging around 3%, it won’t take too long for a company that does not improve market share or reduce salary expenses to begin to experience an expense problem.

So how can a company increase customer retention when there is pressure to keep expenses under control?

The answer lies in employing business work-flows and technology. If you can find a technology that improves customer cycle time (and thereby an aspect of overall customer satisfaction), while at the same time improving internal efficiencies that allow you to reduce staffing, you have highly leveraged your technology buy.

Celent Research has done a great job of illustrating this concept, using the graphic of a claims performance cube. Simply put, the cube has different axes for internal and external forces and it shows how the pieces interlock.

This concept shows it is possible to improve aspects of the claims process on multiple fronts. It changes the notion that a better Customer Satisfaction Index (CSI) means you have to increase staffing to do so.

A good example is the investment in a field appraiser dispatching system. Service industries with similar field tasks to be performed have long embraced automated dispatch mechanisms with route optimizers. Other field service providers, from appliance repair technicians to satellite cable installers, have the ability to reprioritize their fleet of service technicians if a particular service call took longer or shorter than expected. As demanding customers, we expect this ability to be a routine service feature. But the insurance industry, with analogous sorts of operations — be they face-to-face evaluations of a homeowner’s property or bodily injuries, or automobile appraisal inspections — has lagged behind for years. Why have carriers not embraced the technology commonplace in other service industries to perform similar tasks? I believe it has been cost-prohibitive for carriers (other than the largest or second-largest ones) to build a comprehensive integrated system — with dynamic route and skill-set optimizers, GPS capabilities and the ability to customize task duration based on complexity — on their own.

Fortunately, the insurance industry need is no longer faced with a ‘build-it-yourself’ option. A few products are now available for claims department task-dispatch work. So what do you look for when evaluating potential claims field dispatch products?

Key requirements should include the ability to integrate into your claims management system, eliminating the need to re-key data, and automating the dispatch process as a whole. It is vital that the system can also send the data and assignments — via the Web, e-mail, text message, or PDA– to any of the major estimating software applications the industry uses.

A Web-based architecture is also important, because it allows for a fast and safe rollout and implementation.

The system should use your business rules, not theirs. You know your staff and business partners better than anyone else.

Using your own rules will create the optimum schedule for staff adjusters, independent adjusters and body shops.

To minimize your company’s maintenance, the vendor you select should host 100% of the application. This will minimize the workload for your company’s IT department and make sure the necessary safeguards are in place to protect your system and your business.

Once implemented, you will quickly see efficiency gains, because you have leveraged so many parts of the claims performance cube. With customers being better served by quicker response by claims staff with the right skill set, can improved customer satisfaction be far behind?

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Service industries with field tasks to be performed have long embraced automated dispatch mechanisms with route optimizers. But the insurance industry has lagged behind for years.