Let’s discuss a scenario involving Mr. Rodney an insurance customer, Mr. Stick a claims manager with insurance company and Mr. Knowitall the CTO of the insurance business rules engine company.
Mr. Rodney moved from UK to US for a couple of years and bought a house near Florida beach side. He also bought himself a brand new BMW and a SUV for rules engine his wife. Now like everything he got his assets insured by a well known insurance firm “At Best Cover (ABC) inc.” unfortunately this year hurricanes played a major role and one fine morning he finds his roof blown over and cars parked on his neighbor’s balcony. Panicking he calls his insurance company and the real story starts.
He calls up ABC’s call center which routes his call to India, as his claims are for different product lines he ends up speaking to multiple representatives about each of his assets. The story is much worse at the insurer’s end. The insurer is currently processing these claims on legacy claim systems which can mean multiple claim systems within a department. So Mr. Rodney’s claim is entered into multiple systems and the situation is extrapolated with loads of paper based and manual activities to process these claims. The results:
1) Customer Dissatisfaction: Mr. Rodney is already fed up of speaking to multiple people on phones for different claims, it also seems that the customer relationship management system is not consistent hence he hears different stories each time. The back office processing of claims is slow and this is further frustrating Mr. Rodney due to delays and feeling of un-professionalism. Mr. Rodney is already considering a shift from ABC to someone more agile to respond to his needs.
2) Turnaround time for claims processing: It’s been a known fact that claim processing in most insurance companies can take more than 80-90% of total administrative costs. ABC is currently having more than 25 different claim systems and its taking a lot of time to resolve Mr. Rodney’s problem with most of Mr. Stick’s time is getting wasted in manual reporting, registering etc. instead of focusing on processing of claims.
3) Operational bottlenecks: With such complex and pain staking procedures the insurance companies face an issue of inefficient staff performance, increased staff turnovers and obviously very high cost to process claims. ABC is facing touch challenge in making the claim process smooth for its customer and employees.
4) CRM?: With so many different systems, there is bound to be data inconsistencies and redundancy. This also results in ABC having very low visibility on trends, patterns related to customers like Mr. Rodney. A well oiled CRM system should have been able to pinpoint Mr. Rodney’s dissatisfaction by now or better should have been able to prevent it to some extent.
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