CARRIER SERVICE CENTERS
GAIN MOMENTUM

Three insurers report increased agent acceptance

By Dave Willis

Insurance carriers that have built service centers to support business written by independent insurance agents believe they're on the right track. And the numbers seem to support that belief. Travelers Property Casualty, for instance, has seen business processed through its small commercial service centers grow "at a solid 30% clip a year," says Patrick Gee, Travelers P/C vice president of operations for small commercial and personal lines. The Hartford's customer service centers handle policy administration for between 50% and 60% of its small commercial and personal lines independent agent business. SAFECO also is seeing growth in both personal and commercial operations.

Each of the three carriers offers fee-based policy administration services for business written by independent agents. They provide services for all property and casualty personal lines, as well as commercial business with premiums that fall below a certain threshold--typically $10,000. The Hartford, which pioneered the service center concept more than 15 years ago, today runs two personal lines centers--in Charlotte and Reno. Three centers--in Charlotte, San Antonio, and New Hartford, New York--service small commercial business.

Travelers started offering personal lines policy administration services on behalf of agents about 10 years ago, then ventured into commercial lines five years later. Today the carrier runs personal lines centers in Houston; Knoxville, Tennessee; Syracuse, New York; and Fall River, Massachusetts, and small commercial lines centers in Elmira, New York and Spokane, Washington. SAFECO's four service centers--in Bothell and Spokane, Washington; Denver and Indianapolis, serve personal lines customers. The Indianapolis center also provides administration for small commercial business written by independent agents.

While differences exist, service centers, for the most part, perform similar tasks. Patrick says: "We [Travelers] have folks who process certificates of insurance and changes in coverage, and assist in renewal counseling, or answer simple billing and policy questions on the phone. Then we have people who handle paper submissions from customers and agents, relative to changes, certificates of insurance, special billing or audit issues."

John Ammendola, vice president, P&C service, at SAFECO, says service center operations are being complemented by online service. "The primary driver in the service centers is the phone call, but we've started to direct a lot of the activity to SAFECO Plaza," he says. SAFECO Plaza is a Web site designed for agents selling SAFECO's insurance and investment products. "This allows agents to view billing information and claim information as well as to handle policy administration. They can make payments and endorsement changes as well." The site features clickable access to an interactive chat group that is connected 24 hours a day, seven days a week, and is staffed by Spokane employees.

Centers serve both clients and agents. Sharon Ritchey, senior vice president for property and casualty service operations for The Hartford, says at her company, it's fairly even. "Calls to the service center are about 50-50 on the small commercial side, and 40-60--with the 60 being policyholders--on the personal side."

Recognizing and defining roles

Early on, many agents were skeptical--even downright distrustful--of the service center concept. Many still are. But carriers seem to have bridged the gap on several fronts, including trust and service issues. And they say service centers work best when each part of the team--carrier and agent--works from its respective strengths.

Patrick, at Travelers, expands on that. "The way we think about this whole concept is, we're trying to take on policy administration for the agency," he says, noting that the agent still has the core role of overseeing customer service. "That's an important clarification: The agent's not giving up the service or handing over the accounts to us. They're freeing themselves up from doing routine tasks such as policy changes and billing inquiry." Travelers' data show that agents who use its personal lines center can increase time allocated to sales instead of administration from 10% to as much as 50%.

John describes SAFECO's approach as "a partnership" that allows agents to "focus on producing good business, and feeling confident" of the service the carrier will provide.

But it's not just boosting sales capacity that drives agencies to transfer some of their policy administration to carrier service centers. Staffing and training issues also come into play. "In many cases, agencies might have CSRs leaving, or they're trying to reorient their staff to do some things a little differently, providing more value-added services, for example," says Patrick.

Communication, accountability are key

One initial concern agents had with the whole service center concept was losing touch with clients. In response to that concern Travelers has implemented what it calls customer alerts. "There's a whole set of criteria where we'll send out alerts to agencies in relation to policy administration we're doing," Patrick says. "A customer will call, and we can tell during the course of a conversation they may be interested in getting a quote on an additional line of business. If a customer has a concern about anything relative to the policy, let's say they have a concern about something they see in the renewal process, we let the agent know, so the agent can talk to the customer," he adds.

Another agency worry early on was service quality. Carriers responded by addressing accountability and training. The Hartford, for instance, places heavy emphasis on accuracy standards as well as timeliness standards. Recently, the company brought together the accountability of the service centers. "We're trying to leverage our best practices and common practices across the organizations," says Ritchey. "By bringing the centers together organizationally, it allows us to leverage technology and good common practices across the organization."

SAFECO has put accountability at the regional level, which it believes boosts accuracy and increases agent comfort levels. As John explains: "It's allowed us to say to the agent: 'The management team at your service center will be accountable for the states within your region. We expect the management team to not only understand your needs, but to understand the state, understand the contract, understand the legislation, understand the economics of the marketplace, and become the experts on your state.'"

Training also has taken center stage at SAFECO. According to John: "Within the service centers, what's really been critical for us is to create a more specialized service. That means having an employee who is trained on a certain line of business, who is licensed to transact within that state, if necessary, with the expertise to understand what the needs of the agent are."

The Hartford's realignment has helped here, too. Sharon says it lets her operation "take our best people and leverage them across the organization."

At Travelers, Patrick says, employees undergo a four-month, full-time training program. This is followed by several months of floor training during which 100% of the employees' work is evaluated for correctness prior to transaction issuance until a certain quality threshold is met.

Strong retentions bode well for future

Carriers recognize a correlation between employee development--and job satisfaction--and client service. One of SAFECO's critical goals for its service centers is employee retention. "That's an area, unfortunately, where a lot of service centers miss the boat," John says. "You cannot deliver gold-level service with a turnover ratio of 25% to 30%. We're more focused now than ever on bringing in people with the right attitudes, and an understanding of how critical the relationship with the agent is, as well as the retention of that customer.

"Every time we interact with a customer, it's an opportunity to deliver outstanding service," John adds, noting that while people shop insurance because of price, they're much more inclined to consider shopping if they've experienced poor service. "On a positive note, yes, our account retention has gone up."

The Hartford sees similar benefits. "We find that the retention rates are a lot higher," Sharon says. "Agents have the trust in us that we're going to service the accounts, and in doing so, they're less likely to shop when the renewal comes into play."

Carriers want to increase the amount of business they handle in their service centers. Technology will most certainly be part of what allows them to do so. "Travelers will continue to round out capabilities relative to e-service, both for the customers and the agents," says Patrick. "We'll see additional technology come to bear that will make it that much more seamless to connect. For instance, phone technology in many agencies is such that they can do a warm transfer to us, so it appears to the customer that they are still within the agency. More and more agencies will get that technology, and that works out really well for all parties."

At The Hartford, technology also will affect the future. "We've invested in key technology areas that will take us forward," Sharon says. "One is CEMS, or 'Customer Experience Management System.' It's a quality monitoring and recording technology, which helps get us to an improved single-contact resolution. The other piece we've done a lot of work with--and we hope to do a lot more--is speech recognition technology. That's another way we can make it easier for the agent or the policyholder to do business with us."

And that--ease of doing business--will be key to any carrier's success. *

The author

Dave Willis is a New Hampshire-based writer. He is a cofounder and former editorial director of PropertyAndCasualty.com. Previously, he wrote for national and regional business and nonprofit publications, and held senior communication positions for a large global insurer and a respected insurance professional society.