A recent Business Intelligence article draws from a Redhand report claiming that “of all of the subsectors of the RMIS industry, the third-party administrator sector is the one that is the most in transition.” The article suggests this may be due to the fact that TPAs are trying to remain competitive while relying on fewer resources than insurers.
What is clear, according to the Redhand report, is that TPAs are trying to level the playing field with technology. “As will become obvious, there has been a lot of investment and improvement in the TPA sector regarding information technology…” The larger question is, are these substantial investments in upgrading systems even focused on the right area? A survey of customer data indicates this may not be the case.
Claims satisfaction survey shows communication is a top issue
The Advisen 2017 Claims Satisfaction Survey, compiled with the input of 560 risk managers and brokers, lists improving client communication as an issue that cuts across all four lines of business studied: Property, Primary Casualty, Management/Professional Liability, and Cyber. Property customers were “generally satisfied with property claims handling”, but wanted “better communication” plus “online reporting and after hours service”.
Primary casualty respondents noted issues with “cumbersome online reporting portals” and “ a lack of regular communication”. Professional and Management Liability claims handling was ranked the highest overall among respondents, “but many stated a desire for better explanations on coverage and communication.” Cyber claim respondents noted a desire for “earlier and more frequent communication.” Customers are clear about what they want—better communication.
The missing ingredient—connecting the digital experience with customer communication
Customer communication with TPA clients is often defined as whatever messages, reports, and materials are sent (pushed) from the organization to the client. A wider view, however, also includes the online portals and systems the client uses to access (pull) real-time information from the TPA. In both cases, the TPA is communicating with the client. Together, these two components make up the digital experience for the customer. To improve customer communication, both sides of the digital experience must be considered.
The Advisen survey underscores the importance of this connection. Not only do TPA customers complain that they want better and more frequent push communications, they also are demanding better online portals and pull reporting. However, as we will demonstrate, this is not where much of the technological push within the TPA industry is focused, leaving customers frustrated and creating a large opportunity.
Why client communication is a big competitive advantage
There is a clear disconnect between the levels of communication that customers are demanding and what they receive. An Accenture report cites a conclusion by Forrester that speaks directly to this misalignment:
“The customer experience is at the heart of digital transformation. With customers in the driver’s seat of their interactions with brands, insurers must create positive and relevant customer experiences across channels and touchpoints. Although most firms are confident that the experiences they provide surpass those of their competitors and at least meet the expectations of their customers, this is not supported by the findings of other recent business and consumer surveys.” (emphasis added)
The same report highlights how tricky it is to successfully turn communication and digital transformation into a competitive advantage. “Only 9% of insurance organizations feel that they have mastered digital to a point of differentiation from their competitors.” Put another way, despite the significant investments in technology cited in the Redhand report, 9 out of 10 organizations still haven’t figured out how to address the top issue faced by customers. This creates considerable opportunity for those that do.
The challenge of improving the online experience and communication
The recent article Transformation of the TPA speaks to just how difficult this transformation can be. “A recent Forrester and Accenture study found that, while 63 percent of businesses plan to improve their online customer experience, only 26 percent are actually prepared to execute those strategies.”
The same Accenture report mentioned above offers an explanation why this is the case. “Insurance carriers are making strides across the three dimensions of digital transformation — organization, operational process, and technology — but are still struggling with traditional silos and a lack of integration and alignment. Many are stuck offering an average digital experience with limited understanding of what to do next, who should lead, and how to measure success.” Without a fully integrated solution, including tools that deliver the type of communication customers want, success can be elusive.
What does a customer experience that creates a competitive advantage look like?
Origami Risk offers all of the features that are critical for improving both sides of the digital experience.
As our Trends 2018 article noted, consumer insistence on access to self-service tools is likely to continue pushing onward into the business world. Online portals with 24/7 access to customer data, reports, and dashboards fits today’s expectations and lets customers do more on their own. An added benefit is that these portals can also reduce the demand on staff.
The previous post in this series covered how critical the customer-facing interface is in creating a competitive advantage. Personalization plays a critical part in that. Not only does this mean the ability to add logos and carry branding through to the customer-facing parts of the system, but it also means ensuring that different roles and stakeholders within the customer’s organization can each have dashboards, reports, and screens configured to meet their needs. Flexibility built into the system allows customers to control role-based access to data without burdening your staff or requiring vendor modifications.
Strong “push” capabilities
Provide tools allowing customers to specify the frequency and/or the criteria that should drive communications. Event-based messaging allows customers to set triggers that push out notifications, reports, and dashboards to specific stakeholders whenever thresholds are reached. Not only does this put the right information in the right hands at the right time, but features such as auto-generated PowerPoint reporting can translate complex data into powerful analysis that is ideal for management review.
While TPAs continue to invest heavily in a wide variety of technology, focusing on enhancing customer communication through the digital experience could create a significant competitive advantage and demonstrate a highly visible value add.
Get your free ebook “TPA Best Practices: 3 Keys to Differentiation” and see what current studies and reports point to as key competitive advantages for today’s TPA.