February 25, 2014

Insurance Industry Best Practice for High-Volume Customer Communications: Part I Introduction

Written by: Tim Nelms, Business Development and Alliances, EMEA, Archiving Division

Since 1998, I have been working with insurers on to find answers to their customer communication challenges. Over this time I’ve seen many changes in the way insurers’ manage document workflows and customer correspondence. This blog post (and the ones to follow) will, I hope, provide some perspective on this matter.

Let’s start with the basics. Common documents produced in by insurers include quotations, policies, statements, reporting, renewals, wordings, reminders, checks and remittance advices, and statutory letters.

Typically, the underwriting, broking and claims processing systems generate these documents and, of course, the output generation tools supplied with those systems. Where there exist multiple lines-of-business systems, you will often find multiple ways of creating documents.

In an average sized insurance company with 800,000 policies this usually amounts to between 25,000 and 30,000 documents generated per day or 500,000 documents per month. In total between 6 and 7 million documents will need generating, printing and posting or mailing each year. Common problems insurers face in the process includes:

  • How do you generate document from line of business systems and are these tools and techniques flexible enough to meet changing business needs?
  • Can you react quickly to the need to rollout new products or indeed existing products into new markets?
  • Do your customer communications meet high standards for quality and presentation? Are they easy to read?
  • Do call center staff or claims operatives need to generate custom responses to customer calls or do they have standard templates? Is there an approval workflow in place to manage the custom documents?
  • Do you use common templates and wording across customer correspondence in your underwriting or claims systems?
  • Where in the process do you add relevant marketing materials for cross or up-selling purposes?
  • Can you deliver documents through traditional postal (mail) channels, as well as, electronic delivery?
  • Do your customers request or have access to a portal for all their customer communications?
  • Do you comply with industry regulation such as the UK Financial Services Authorities Insurance Conduct of Business guidelines? How do you manage business records?
  • If you have documents coming into your company do you manage these using the same systems as you do for outbound correspondence? Can you automatically action information found in inbound correspondence?

These questions speak not just to the efficiency of the core policy administration and underwriting systems of insurers, but to the end-to-end process of managing unstructured content in the form of documents and communications with the customer. That is why so many insurers have not only enterprise systems for policy administration but enterprise systems for document workflow as well.

The challenge is for insurers to automate the processes needed to deliver high volumes of complex documents to customers, while achieving the highest levels of document personalization and quality. Traditionally, the costs associated with delivering high-quality and highly-personalized customer communications, relevant to risk type, client and product has been too high to justify such improvements. As always the need to control operational costs whilst maintaining operational flexibility and responsiveness to new business lines is a fine balancing act.

The diversification of product portfolios and the requirement to comply with regulatory guidelines that govern what information must be provided to customers has had a dramatic impact on document generation processes. Delivering compliant, branded mass communications without manual intervention or Straight Through Processing (STP), as it is known, is a significant challenge.

In my subsequent posts, I’ll be talking more about legislative issues, document generation issues, print production processes and archiving/records management. Stay tuned for part two of this six part series.
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[Image courtesy of: willwhitedc]