Posted by
Stephen Bruno
on
4/29/2009 at 8:04 AM
Along with innovative products to suit the diverse needs of consumers, empowering the consumer is essential for business prosperity in the healthcare insurance industry. With ever increasing numbers of insurers and insurance products on the market, consumers need adequate information to make the important and personal choice of healthcare coverage. Insurers need to be proactive in providing a high level of service to both attract new consumers and retain membership.
Most carriers utilize some form of marketing activity to get in touch with customers, whether it’s local TV, radio ads, or national commercial spots. Regardless of the medium, these efforts can be for naught if carriers do not also leverage a customer relationship management (CRM) strategy. Leveraging an effective approach to CRM ensures that carriers are proactively managing their interactions with potential members to give them the right information at the right time, empowering them to make the right choice of coverage.
How can a carrier effectively interact with each and every consumer? The key lies in leveraging your most important asset: the agent. Whether you work with in-house agents or independent brokers, your representatives are on the front-lines of customer interaction. Therefore, the best strategy for empowering the consumer begins with empowering the producer. This strategy can be tough because of the complexity of managing a large distribution channel or multiple channels, and this is why it’s critical for health plans to look for new tools to streamline the processes.
A comprehensive CRM technology solution allows inside sales managers and producers to seamlessly share information. A fully-integrated approach – connecting CRM to other systems such as billing, enrollment, and compensation management - automates every step in the sales cycle. With such a system in place, carriers can be proactive with sales, organizing prospect information, the producers’ interaction with them, and the details of where the consumer is in the buying cycle.
For example, a new prospect may receive a certain pamphlet, then a comparison chart, then a quote, before they become a member. After that point, they’ll receive the premium bills, other communication from the carrier to inform their healthcare choices, and renewal communication before the end of the year. With the right system in place, carriers themselves become empowered with inside knowledge to the sales process, measuring effectiveness through analytics and reports and adjusting strategies on an as-needed basis.
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Posted by
Joseph Westlake
on
4/22/2009 at 8:13 AM
2008 was a good year for Insurance Incentive Compensation Management Application vendors, and 2009 forecasts similar, if not better results. A paper by Gartner on the MarketScope for Insurance Incentive Compensation Management (ICM) Applications sheds some light on the direction the Industry is heading.
With 18 to 22 ICM deployments projected for the next 12 months in the Insurance industry, the coming year looks promising to ICM vendors and Carriers alike. And vendors must be prepared to provide best-in-class ICM applications.
In comparison with other industries, incentive compensation for insurance entails complex contract and commission structures, hierarchies, and regulatory compliance requirements. The challenge for vendors is to understand the industry and the Carriers’ business requirements thoroughly to deliver the most effective solutions. Though there are companies who are fast learning the tricks of the trade and developing their own incentive compensation solutions, companies already equipped with the required domain and industry expertise stand a better chance to design the most suitable applications to impact clients’ (carriers’) bottom lines directly.
The following article emphasizes the importance of reorganizing compensation practices.
In their article "Executive Compensation in a Troubled Economy: Different Thinking for Different Times", DolmatConnell & Partners suggests two fundamental shifts in thinking relative to bonus plan design for a time (i.e., now) when there is little visibility into where the economy or even individual firm financials are headed over the next six to twelve months.
From the article:
- Consider using two six-month plans or even quarterly plans instead of an annual plan. This shortened window provides both increased visibility and the ability to reforecast and reset targets.
- Consider a lessened focus on financial metrics and more emphasis on the achievement of key non-financial objectives that will improve the health and competitive positioning of the firm. With financial visibility nearly unknown, there is a way to provide a focus on necessary strategic accomplishments in order to be well-positioned when economic recovery happens.
The above points reconfirm the importance of flexible yet robust compensation plans. There is greater stress on talent retention and performance appreciation, the right way, in tough economic and financial situations. Designing a precise compensation plan and deploying it through conscientious compensation management is imminent now, more than ever. Additionally, heavy data-based calculations are processed in no time through automation, so staff can focus on their primary interests in the organization, rather than on tedious shadow accounting.
There is an equal focus on maintaining higher levels of visibility in compensation calculation. The greater the transparency in the process, the stronger is the trust and loyalty between the employee and employer. This fortified relationship ends up motivating workforce to perform to its highest potential given the current scenario of tight competition.
Considering the trend forecasts of companies to transform their processes to reap more benefits and impending deployment of ICM applications by various Carriers, 2009 may reveal greener pastures for ICM vendors.
Incidentally, Insurance Networking News reported of a Deloitte report that delves into the operational inefficiencies of life insurers adds another dimension to the current situation.
An excerpt from the article:
Indeed, as the economic slowdown ushers in a sustained low-growth environment, insurers would be well served to explore measures in cost containment and efficiency, according to Deloitte. “Cost containment in all aspects of the annuity business remains paramount” the report states. “A low-growth market requires disciplined cost control to enhance profitability.”
While this is all well and good, where do insurers start? Traditionally, ACES has focused its cost metrics on key operations such as customer service and new business, this year it added analysis on corporate overhead and marketing, product, and distribution (MPD). It found that companies wanting to attain competitive advantage need to tackle overhead and MPD, which represent 74% of total annuity expenses. “With the downturn in the economy, executives need to look at MPD and corporate overhead in the same structured way they evaluate new business and customer service expense,” it states.
The growing focus on Incentive Compensation Management amongst insurers, as reported by Gartner, coupled with Deloitte’s report on cost-cutting for MPD suggest that Incentive Compensation Solutions are crucial to making the insurance sales force perform to their highest potential while successfully satisfying company objectives in the current turbulent economy.
There is great significance in competitive sales performance that achieves excellent results while keeping a healthy check on the compensation paid. For this functionality, companies need to embrace robust and seamless Incentive Compensation Management Applications. Those who don’t will surely suffer the consequences, as this excerpt from the article points out:
“Thus, the impact of inefficient processes and obsolescent technologies will take an increasing toll on those companies that simply maintain the status quo.”
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Posted by
Stephen Bruno
on
4/15/2009 at 6:40 AM
Dramatically cutting IT spending and waiting for the crises to pass may not be the right approach to deal with the current financial situation. Instead, a strategic approach of investing in IT for a competitive edge could reap better results. According to insurance analyst Matthew Josefowicz, “carriers should be making those long needed reforms in their operating strategies and technology capabilities”. Increasing demands coming from both consumers and distributors are going to enable those who make advances to get noticed – and that’s a surefire way to regain control of the bottom-line.
In a recent survey conducted by Celent among CIOs of various insurance carriers, growth in the business, cost reduction and distribution dominate the insurance IT concerns for 2009. This article in Insurance networking news, covering Celent’s annual roundtable, encapsulates the path CIOs are prepared to take to herald their dominance in their respective segments. They all look towards IT to resolve their issues.
It’s heartening to note that the panel attending the roundtable echoes similar sentiments on the role IT can play in the insurance industry. The thoughts expressed during the roundtable on “Managing IT in times of crisis” welcomes the positive impact of technology on business processes.
Offering an upbeat assessment and action plan, Andy Edwardson, VP, Information Technology for Farmers Alliance, and winner of Celent’s 2009 Model Carrier award, told the audience that it’s during tough times that the business turns to IT for help with business objectives. “It’s a time when IT can really shine.”
It’s true that companies can efficiently leverage processes through a proper implementation of the right IT product. The workforce can be kept on business critical activities that impact revenue generation as IT takes control of the redundant activities and minimizes time frames improving accuracy drastically.
Paul Vancheri, SVP and CIO of Boston-based Fidelity Investments Life Insurance Co., a provider of investment and retirement products opines, “The sales groups are under pressure because they have to deliver more with less. This means more investment in IT.”
Economically tough times bring heightened competition to win business opportunities, and producers are being tapped to improve performance. They are the backbone of a successful insurance company. They help in improving market share and ensuring revenue generation to keep the company machinery running. Companies that support their agent force with ideal technology tools guarantee an active improvement in their performance. Additionally, calculating their commissions through a keen Incentive Compensation Management system takes the momentum of the sales teams to the next level.
From his perspective, offered Benjamin Roberts, CIO, Commercial Lines, Middle Market & Specialty at The Hartford P&C, “With our specialty lines it’s about streamlining business within the channel. So we need to be more thoughtful about what our producers need. And, we are using technology to become much more scientific as to segments we target.”
With the advent of innovative products in the market, it is imperative for carriers to take the cutting edge route to attract customer interest. What better resource than IT to support scientific approaches to understand the market trends and customer needs?
A sign that the economic climate cannot put a damper on IT spending was the level of IT spending by Conseco Services LLC. Emerging from bankruptcy, the company still intends to spend on IT. Though they plan to spend 40% less in 2009 than 2004, they are only spending 8% less in 2008 than in 2007. So, although the company has undergone some tough times, their IT spending is not continuing to drastically decline.
Russ Bostick, EVP, Technology and Operations at Conseco Services LLC, an Indianapolis provider of financial services products to the consumer middle market, reported that his company may be the exception (having emerged from bankruptcy), spending 40% less in IT in 2008-2009 than in 2004. “However we will spend only 8% less in 2008 vs. 2007. Our more radical spend changes really reflect where our company has been and where it’s going.”
The above opinion reiterates the faith that insurance industry is placing in IT to help them through economically tough times. This attitude towards IT spending is beneficial to struggling companies and performing companies alike. Trusting in innovative technology investments to carry insurance companies through the downturn and into the future is forward-looking and a wise bet.
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Posted by
Stephanie Bruno
on
4/8/2009 at 10:00 AM
I came across this very interesting article concerning employee welfare. The author, David Meyer, owner of Coaching for Tomorrow, gives good insight into the psyche of performing employees and how organizations should approach retaining such talent.
The 12 questions that performing employees want answered, as David Meyer mentions in his article are:
1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last 7 days, have I received recognition or praise for doing good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel my job is important?
9. Are my coworkers committed to doing quality work?
10. Do I have a best friend at work?
11. In the last 6 months, has someone at work talked to me about my progress?
12. This last year, have I had opportunities at work to learn and grow?
His article delves into the reasons companies need to keep employees motivated and perform better. The topic is further justified considering the current economically tight times.
It became evident to me that a well-rounded incentive compensation management program can solve a major portion of the employee concerns raised in the article. Let us take a closer look at how incentive compensation management technology fits in to keeping employees motivated.
When incentive compensation management systems are correctly designed to align employee goals to company objectives, the question of “What is expected of me at work?” is a non-issue. Once targets and quotas are identified for each employee, the opportunity for confusion or doubt is nullified.
However, when employees are made to work on redundant activities like shadow accounting – recalculating compensation to check if the company is paying them their correct compensation benefits – their motivation starts nose-diving.
Instead, a robust compensation management system in place not only provides transparency to the compensation calculations and metrics, but also builds confidence in employees to focus on priority-based and business critical activities - activities they do best. Their enhanced focus on the job helps the company as well.
With reliable performance reports, every employee is acknowledged for their merits. When a sales rep exceeds his/her monthly quota target, it is reflected in the incentive compensation reports – and their paycheck. The recognition of their performance continues to encourage them to perform and makes them feel important to the company’s business activities. Of course, words of appreciation cannot be generated by technology, and are still best delivered by supervisors!
In six months time, the impact of a compensation management system on employee morale becomes evident. Especially when integrated with a Customer Relationship Management (CRM) solution, the entire client base that sales reps have generated for the company is stored and easily accessible, calling more attention to performance. Further, this data can be recalled at any point in time to measure the progress of each employee – be it annual, quarterly or monthly. Employees can keep a track of their performances and learn where they have improved and where they need to focus. This ensures employee gratification in their career growth as well.
All in all, a robust Incentive Compensation Management definitely plays an integral part in companies’ processes, assisting them in keeping employees motivated and retaining talented performers.
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