As Published In May 2005

Inside the Customer
By Carol Hildebrand and the staff of CXO Media

Beneficial Financial Group builds a Web-based portal for a complete view of the customer.

The No. 1 annoyance for customers: being stuck on the phone, waiting while a customer service rep taps away at a keyboard, tunelessly whistling while the computer chugs through an assortment of systems and applications. Annoyance No. 2 is a balky self-service experience, when the customer goes online to access information about the different policies, accounts, or records within the bowels of a corporation's computer systems.

Snapshot Beneficial Financial Group (formerly Beneficial Life Insurance) www.beneficialfinancialgroup.com Location: Salt Lake City, Utah Year founded: 1905 Employees: Approximately 300 at corporate headquarters and 700 field agents Assets managed: Close to US$3 billion Oracle products and services: Oracle Database; Oracle Application Server; Oracle E-Business Suite, including Financials and Human Resources

Beneficial Financial Group, a Salt Lake City-based financial services company, is working to eliminate both of these areas of annoyance, and the company is finding that its efforts are being repaid with increased customer satisfaction and improved employee productivity. The company started out by evaluating straight CRM applications, but nothing was geared specifically for Beneficial's industry, says Steve W. Terry, CIO and senior vice president of Customer Operations. Terry was looking for technology that would be easily accessible by anybody who touched a customer transaction, regardless of technical literacy or accessing platform.

Playing 20 Questions

Rather than have to retool the myriad existing applications containing customer data into the rigid confines of a CRM system, Beneficial went with Oracle Application Server, which provides a portal to Web-based applications. "We need an assimilated view of customer information," says Terry. "Oracle Application Server allows us to get data from disparate sources and bring it all together onto a Web page," he adds.

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The result is what Beneficial calls Customer Care, a Web-based application that offers customized data and services, depending on who is accessing it—customer, sales agent, customer service representative, or anybody else who touches client data that flows through the company.

What spawned Customer Care was a desire to consolidate answers to the top 20 questions a customer service representative needs to respond to, be they from an agent or a policyholder. "They're generally questions such as 'What's the value of my policy? Who's my main beneficiary? Who's my agent of record?'" says Terry. "The questions are generally simple, but we learned that we had to open five or six applications just to get that information, because different bits of the data resided in different applications."

The result: wasted time, as representatives clicked through a handful of screens to get at the data, and wasted opportunity to build customer relationships through fast service. Terry says that the application has reaped benefits in the form of much faster response times. Customer Care forms an easy-to-use front end to the disparate data sources, giving customer service representatives a single screen that presents the answers to all of the top 20 customer questions. "It doesn't matter which language the application was written in; we could just pull the data," says Terry.

In addition to the frequently-asked-questions page, Customer Care provides customer service representatives with as full a picture of the history of each policy as possible, from images of documents to full notes of previous customer conversations, all stored in Oracle databases. For example, each life insurance policy application involves a recorded health history, complete with a digital voice signature. All of that audio history is linked to the policy number and available to customer service representatives.

Resources Oracle Solutions for Insurance Oracle@Work: Dongbu Insurance Lowers Cost with Oracle's Web-based CRM

Cutting Out the Paper Chase

It's also a different world for customers, who have direct access to another facet of Customer Care, a policyholder portal that enables customer self-service. Policyholders can make payments on policies; view policy values; see images of documents; and initiate proceedings such as changing address and beneficiaries.

Finally, Beneficial's agents and investment advisors use Customer Care to access an intranet geared to their specific work groups. (Beneficial has branched out from its core business of life insurance to cover financial services such as annuities, stocks, and bonds, and the compensation structure differs, depending on the product.) Agents can access Customer Care via the Web. They can track new business, contact other agents through a company contact database, and access the latest training for each work group. "It's a lot easier to train on, and people can go through the modules at their own convenience," says Terry.

Terry sees a future in which Customer Care becomes even more interactive. For example, a planned 2006 upgrade will link the company's VoIP phone system to the application. By linking phone numbers with policy numbers, for example, it will put pertinent policy information in front of customer service representatives before they even pick up the phone. "This is a huge tech enabler," says Terry. "We expect it to scale very well."

Trend Watch Q&A Deborah Smallwood: Compliance in the insurance industry How do insurance companies handle the myriad regulations that govern their business? We spoke with Deborah Smallwood, vice president of the insurance practice at TowerGroup, a Needham, Massachusetts-based research and advisory firm serving the global financial services industry. Smallwood provides strategic advice to senior business and IT leaders. PROFIT: What are the main compliance issues facing the insurance industry this year? SMALLWOOD: Besides the normal day-to-day state compliance laws, the insurance industry has been hit hard with federal mandates such as the Health Insurance Portability and Accountability Act of 1996 [HIPAA], the Financial Modernization Act of 1999 [Gramm-Leach-Bliley Act, or GLBA], the USA Patriot Act of 2001, and the Sarbanes-Oxley Act of 2002. These regulations have required additional resources and caused insurers to incur costs that may be passed on to consumers and other stakeholders. PROFIT: Are there new regulations on the way for which insurance companies need to start preparing? SMALLWOOD: Yes—SMART [State Modernization and Regulatory Transparency Act]. The current state-based regulatory environment appears to be under scrutiny, and the market appears poised to take action. The challenges and demands placed on the industry from some of the recent federal regulations have shifted the sentiment toward regulatory modernization in the insurance market. Regulatory modernization appears inevitable since former New York Attorney General Eliot Spitzer focused the spotlight on market conduct and U.S. House of Representatives Financial Services Committee Chairman Michael Oxley raised concerns regarding the speed and responsiveness of the state-based insurance regulatory environment. The question is what direction the modernization will take. All insurers need to keep an eye on the pending legislation. Any type of change will drive the need to streamline business processes, build flexible IT systems, and drive access to real-time data and enterprise reporting. Those companies that address these issues today will be well positioned. PROFIT: How do current regulations affect information systems? SMALLWOOD: Usually new regulations hit information systems head-on and have a costly rippling effect—of both time and money—throughout legacy systems, disparate databases, and new IT development projects as well. How an insurer addresses these issues depends on how it defines compliance readiness and the level of sophistication of its business process and IT environment. There are three ways—base, standard, and enterprise—by which a company will address new regulations. It will be based on key criteria in culture, governance, policy and standards, process and content control, and data and technology. Most often, it is the organizational culture that is a critical factor in changing how the company deals with risk management. Process improvements and IT investment tend to follow. PROFIT: How compliant is the industry at large? SMALLWOOD: Insurers have always placed a high priority on auditing, compliance, and risk management and are known for their rigorous corporate governance models to protect the financial interests of their policyholders and shareholders. This is necessary because the insurance regulatory environment mandates that insurers maintain strict controls, reporting, and investment guidelines to meet state and federal requirements. In addition, stringent financial and operational standards are necessary to obtain coveted top ratings from industry watchdogs such as A.M. Best, Standard & Poor's, and Moody's, among others. However, this new influx of federal mandates seems to have the industry aflutter as companies realize that these mandates can serve as a catalyst for a long-term business and systems-architecture strategy and process improvements in risk management and enterprise reporting. PROFIT: How does the insurance industry handle enterprise reporting? SMALLWOOD: Not well, and this continues to be a challenge for most companies. TowerGroup contends that the globalization of insurance and the complex regulatory environment requires a systematic and integrated approach to risk management and enterprise reporting. Enterprise risk management may be a big and audacious goal or a critical factor for success. Insurers must be careful when considering new IT investments and take time to thoughtfully assess the fundamental framework for enterprise risk management in culture, governance, policy and standards, process and content control, and data and technology.