2/25/2014

Business After Hours

Insurers and the temporary housing industry jump into the growing trend of 24/7 service.

By Stephanie Moore

Businesses are constantly evolving in order to stay competitive, and the insurance industry is no exception. Trends come and go, but there are those that end up revolutionizing the way business is conducted.

One trend that is growing in importance and changing the insurance industry is the way companies care for their customers after the typical workforce goes home and when most people are sleeping—from 5:00 p.m. to 8:00 a.m. This often is referred to in our industry as “after hours.”

Availability beyond what was once considered normal business hours is no longer something the insurance industry can address only when there are new claims or during major disasters. Instead, it is becoming standard business practice. It is a trend identified in the temporary housing industry due to the nature of its service, but it is one that is affecting the insurance industry as a whole.

If you think about it, we already live in a 24/7 world. Consumers do their banking at any hour of the day online through mobile portals or at ATMs. Many retail stores are open 24 hours a day, and you can place orders with a live person easily at any time, day or night. With the increase of smartphone applications, consumers have access to many of their favorite businesses after hours and have become accustomed to managing transactions at their convenience and as their schedule permits.

How companies outside of insurance like Apple, Amazon, FedEx, and Gap have responded to consumers has changed service expectations. Why is this relevant for the insurance world? “First and foremost, when interacting with any of these companies, it is the customer who makes the choice of how to engage, not the company,” says Michael Costonis, executive director of Accenture’s Global Claims Practice, in the study Rethinking Claims. And today, customers are choosing convenience.

Meeting Housing Needs 24/7

Nothing elicits the need for immediate action like damage to a home. A variety of situations can cause a loss in a home, and many are likely to be caused or noticed once a family has returned from work at the end of the day.

For example, the National Fire Protection Association’s Home Structure Fires study found that home fires peaked between the dinner hours of 5:00 p.m. and 8:00 p.m. House fires, water losses, and other types of emergencies can, and typically do, occur during the evening or over the weekend due to the increased use of cooking equipment, smoking materials, plumbing and electrical systems, and other sources of home structure losses.

When a home has been compromised, policyholders may not be able to wait—nor should they have to—until the next business day to report a new claim. Insurance companies always have provided a way for policyholders to communicate after hours. However, with the trend toward policyholders seeking more direct communications with their insurance carriers (and retention resting on the claims experience), insurers are increasingly focused on ways to make it easier for customers to speak to a live person on the phone no matter the time of day. Expanded, after-hours coverage means insurance carriers ensure issues can be addressed at any hour.

“The industry is definitely shifting toward direct channels,” says Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, in his company’s 2013 Property Claims Satisfaction study. “As that shift continues, the key for insurance companies is to ensure that their call center representatives are fully trained to provide the claims experience that their customers have come to expect.”

Insurance companies have realized the value of being available to consumers, and thus have revamped their business models to capture people when they are most likely to do business and complete transactions. They also understand that having various channels of communication open to connect with customers is crucial for their success. However, availability after hours is not only about revenue, but also increasing continuity in customer service and overall customer satisfaction to stand out above the competition.

The New Claims Normal

Insurance companies and claims professionals have an expectation that emergencies will take place between 5:00 p.m. and 8:00 a.m. As a standard practice in the past, individuals would take turns being on call in addition to their typical workloads, sometimes sleeping with cell phones under their pillows or on nightstands in order to assist with those late night or weekend calls.

However, there has been a dramatic shift away from this practice. Instead of requiring daytime employees to rotate on-call duties, many carriers are hiring employees to work the second and third shifts. This provides a higher level of service for the policyholder and a better work/life balance for daytime employees. Insurance companies have spent the last few years building after-hours units that focus not only on assisting with new claims or emergency mitigation, but also on resolving any issues that arise.

Temporary housing companies have followed the carriers’ lead by increasing their after-hours presence and availability in order to better support and meet the needs of both the insurer and displaced insureds. While everyone else is asleep, temporary housing companies can create teams of highly trained employees and managers who are available to assist in short- or long-term housing needs no matter the scale. They quickly can book a room at any hotel chain near the damaged property, handle a midnight customer service issue, or calm a sleepless policyholder by answering the questions that may be keeping them up late into the night. By being fully functional at every hour of every day, temporary housing companies are able to complete any request received, at the convenience of the customer.

There are costs to consider when hiring, training, and implementing a full-solution, after-hours program for insurance carriers, temporary housing companies, and vendors. However, the investment is recouped easily by the speed in which claims can move through the process, which saves money for all in the long run. When temporary housing companies invest in after-hours employees, it allows them not only to field calls, but also the additional time to search for long-term housing properties. By getting families moved into housing faster, insurance companies typically can cut costs by as much as 50 percent over having the family stay in a hotel—a potential savings of thousands of dollars per claim.

Response to the 24/7 trend was already underway when insurance companies faced historic levels of catastrophic events in 2011 and 2012 and may be, in part, the reason policyholder experience remained positive. “Despite increases in both the frequency and average severity of property damage in the U.S. during the past two years, the fact that customer satisfaction remains high is a testament to how diligently the personal insurance industry has responded to its customers,” says Bowler.

From a business perspective, having a temporary housing company staffed and available to adjusters and policyholders 24/7 makes good sense. Some temporary housing providers that have after-hours programs in place have seen claims during that time period increase to 20 percent of overall volume. There always will be a less significant need outside of standard business hours, but many organizations have realized that increased availability creates an opportunity for a higher level of service, which impacts the overall business in many ways, especially retention.

Insurance carriers stand to benefit the most from the after-hours trend. When policyholder response times are quick, it avoids the need for additional calls to be made later. It means the housing company can take the burden off of adjusters, as intended. Plus, quick response times ensure the best possible customer service. When customers are happy with their first contact and the various vendors with which they work over the course of a claim, it reflects well on the insurance company.

“Customer expectations have changed, and demands will only increase over time,” says Costonis. He adds, “Claims service is where the insurance company is put to the test in terms of its ability to delight or disappoint the customer.” Why not delight your customers 24/7?   



Stephanie Moore is a director for CRS Temporary Housing. She has been a CLM Fellow since 2011 and can be reached at (800) 968-0848, http://crstemphousing.com.

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