Policy Conservation – creating a more robust business for our partners in Indonesia

As an emerging market for direct insurance within the region, Indonesia presents a number of unique challenges for Precision Marketing and our partners.

Under the umbrella of what we call ‘policy conservation’, we work with our partners in applying a series of initiatives to:

  • ensure the maximum number of new policyholders who have agreed to attain a personal protection product pay their first premium (what we call ‘new customer paid rate’)
  • ensure the monthly attrition on the direct insurance portfolio is maintained at a level that is suitable to all parties involved in the program (what we call ‘policy persistency management’).

Precision Marketing in Indonesia has made significant progress in improving policy conservation metrics. Whether a policy conservation issue is related to a voluntary request (a customer calls to cancel), or an involuntary event (for a particular reason we cannot obtain the premiums from a policyholder’s account in a given month), Precision Marketing has the necessary processes to address the matter and apply the best solution.

It all starts with the customer data

As a business that promotes a data-driven marketing philosophy, Precision Marketing’s view is that the success of a direct insurance program begins with the data strategy. Put simply, all parties involved in the program want to market to individuals who are more likely to pay their first premiums, and remain policyholders for the long-term.

Precision Marketing’s modelling and analytics strategies ensure we attain the best possible lead files to work with.

A customers account type is also an important consideration. Traditionally, credit cards as a payment mechanism outperform other transaction account types when reviewing policy conservation-based metrics. Some bank accounts within Indonesia are quite unique in the way they are designed, so particular care is given to customer selections with this in mind.

A cultural change

For a number of years, our observations are that the telemarketing sales culture in general in Indonesia has been less consultative, and more a ‘push sale’ due to a culture that provides reward for high volume selling, and where two-way communication with the customer has not been encouraged.

As a result, we are driving a cultural change in our partner call centre facilities. We are holding regular intensive coaching and collaboration sessions with the call centre managers and telesales representatives to encourage two-way engagement with the customer. We are also focusing on building rapport with the customer by introducing dialogue that encourages them to consider their protection needs.

Regardless of whether a sale has been attained or not, the customer leaves the call with a more educated view of the importance of personal insurance and a memorable customer service experience.

Importantly, the managers, supervisors and team leaders within our partners call centre facilities have embraced this new way of communicating the proposition to the customer. With full support, we have found the telesales representatives soon follow, and conservation-based metrics improve.

Carefully monitor the telephone entry level

With any direct insurance program, the greater the value of the policy sale, the more revenue will be attained for our client. It is important to watch all metrics to ensure success on one does not impact another. A campaign that features higher-value sales can result in a reduction in ‘first paid’ and ‘persistency’ metrics.

Of course, if the interaction with the customer is comfortable and engagement is strong, we encourage our telesales representatives to discuss with the customer an equally suitable higher-level plan option and/or a cross-sell to their spouse or family. However, in the majority of cases, price is a significant factor in not only securing the sale, but first paid and ongoing persistency metrics.

The Precision Marketing business in Indonesia encourages the telesales representative to be sensible in selecting an appropriate entry level, whether this is a ‘Value’, or ‘Intermediate’ plan option that carries a more affordable monthly premium. The new policyholder is more likely to pay and persist if they are sold a policy that is both suitable to them and affordable. To generate incremental premium, we'll ensure a suitable plan type upsell, or partner/ family add-on is offered to them on their birthday, policy anniversary or other significant event.

The importance of quality assurance

In any sales-driven environment, a focus on quality assurance is paramount. A team dedicated to monitoring each sale and scoring the telesales representative on various attributes is now in place across all facilities in Indonesia. During the past year, the focus has been on customer responsiveness, empathy and exploring customer needs.

Telesales representatives’ sales from prior months are monitored and first paid and persistency metrics are tracked by individuals. This ensures higher performing representatives can assist by being mentors to the wider team and lower performing representatives can be coached in smaller, more intensive groups.

A health check on the basic operational processes

A policy conservation program can only be successful if the basic processes within the insurer’s administration and service functions are in check.

Our relationship encourages open communication across all customer touch points.

All steps are taken to ensure that the new policyholder receives their policy documentation in a timely fashion and that their schedule clearly states their premium billing instructions.

A process that enables premium deductions to occur on an agreed date within the month by the policyholder is ideal. If the arrangement with the insurer or retail distribution partner does not allow this, ensuring the customer is billed on the same date each month is encouraged.

Although voluntary customer-initiated policy cancellations are minimal with our Indonesian programs, where the reason for cancellation is the cost of the policy we encourage the policyholder to consider a downsell to a more affordable plan. Otherwise, their record is flagged to ensure they receive what may be a more appropriate product offering in the future.

Our tele-retention team

Precision Marketing has assisted in developing a dedicated unit within our insurance partner to deal with the day-to-day administrative challenges and issues that arise within the direct marketing programs.

With a separate set of conservation-based metrics and reporting functionality in place, both new and existing policyholders, who for any number of reasons ‘fail to bill’, receive SMS reminders and a courtesy call three days prior to the next billing attempt.

During the past year, the majority of policyholders who received a call were unaware they had insufficient funds on the billing date. However, for those who are aware, they need to be ‘re-sold’ on the benefits of the policy for a second time.

The tele-retention team is continually improving its ‘contact to successful premium collection’ metrics; the consultative approach has proved to be successful in improving the broader conservation metrics across all programs.

Where to from here?

Continual oversight and hands-on involvement is a commitment by Precision Marketing to all of they’re partners to make sure the policy conservation message is fully embraced. Improving paid and persistency metrics requires focus on numerous elements within all parts of the business: the insurer, retail distribution partner and call centre. With a set of agreed conservation benchmarks in place moving forward and a new culture that has been adopted by all involved, Precision Marketing will be aiming to deliver the best results to our Indonesian partners, and the best experience for their customers.