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What Came First, The New Application or The Follow-Up?

As an insurance company leader, do you ever wonder if your new business department spends a disproportionate amount of time doing follow-ups on existing customer applications rather than focusing on processing new ones? 

This imbalance is a common pain point Trindent Consulting has observed in their engagements with large insurance firms.  Client data shows us there is a clear-cut area of opportunity in this imbalance, as new business departments are spending excessive amounts of time handling follow-ups – considered to be non-value work – instead of processing new applications.

Using the 2nd Lean principle (Mapping the Value Stream), an insurance company leader should be asking three questions to determine what the optimal amount of time is to spend on a non-value activity like follow-ups:

  • “Would the customer pay for this activity?”
  • “Would more of this activity be good for the firm?”
  • “Does this activity help move a process along?”

But because the answers are not black and white, insurance companies often allow themselves to be lenient towards non-value activities they see as necessary, such as follow-ups. 

What’s the Issue with Follow-Ups?

In a perfect consulting world, follows-ups wouldn’t exist because they are essentially re-work, the embodiment of inefficiency.   Every new application would be submitted only after it was completed correctly and in its entirety, and could be reviewed, underwritten and sent back to the right agent with a rating and price in a single cycle.   

In reality however, follow-ups are an unavoidable part of the insurance application process and will never be eliminated because human error on the part of applicants cannot be controlled.   Follow-ups occur when additional information, or corrections to existing information, is needed to complete the application process.  In the insurance industry, it’s an acceptable practice to go through one or two, or sometimes even three, follow-ups for a single application.  However, when the follow-up count reaches four, it becomes a problem.  The repeated follow-ups cause applications to repeatedly cycle through and clog up the system and create an imbalance in the volume of follow-ups versus new application processing.

What Can You Do?

In order to solve this imbalance, it’s important to set proper parameters to reduce the rate at which follow-ups occur.  This requires a deep dive into call center data in order to understand why follows-up occur, and to determine what can be done to reduce them.  

Through questions like these, call centers can begin to understand where to focus their process improvement efforts:

  • Which form or section of the form causes the most problems?  Is the problematic form or section of the form confusing?  Can it be easily changed?
  • Is there a specific agent who is a repeat offender?  Can guidance or incentives be provided to change their behaviour?
  • Are we internally too stringent on some of the forms?   Are we letting the perfect get in the way of the good?
  • Are staff adequately trained to know what really requires a follow-up and what doesn’t?

The answers to these questions can become a guide for call center leaders to restore balance to value-add versus non value-add work, and to make their teams more productive. 

Follow-ups are only one of many inefficiencies that insurance companies face.  Trindent’s methodology for call center improvements is a tested and proven systematic approach to extract, analyze and implement solutions to processes, systems and behaviors to drive sustainable results.   

Click here to learn more about how Trindent can develop a solution to drive your call centers’ efficiency.