The Heartbeat of Claims Adjudication: Measurements, Attributes and Efficiencies
The Heartbeat of Claims Adjudication: Measurements, Attributes and Efficiencies

The majority of vehicle service contract claims are processed in a claims call center (CCC) by adjusters of varied background and experience. The CCC usually represents the second-highest operating cost next to the claims themselves. When evaluating the cost effectiveness of a CCC, it’s important to start with claims and customer-service processes. Well-defined processes produce numerous areas of measurement, giving management team members an inside look at how their customers’ needs are being met.

In addition, CCC attributes — such as training initiatives — contribute to agent satisfaction, which in turn is directly related to customer satisfaction. When combined, sound processes, attentive measurement and positive attributes lead to an efficient and profitable call center operation.

Measurements, Their Definitions and Importance

Service contract claims administration is classified as a knowledge-intensive business service (KIBS). Our Industry heavily relies on professional knowledge to determine eligibility and apply benefits in accordance with the terms and conditions of the contract. In our KIBS environment, we see and use two distinct types of processes: information system business processes (ISBPs) within the technology platforms and human intensive business processes (HIBPs) governing the decisions based on professional knowledge. Each of these processes will produce different sets of measurements which should be analyzed together to obtain the highest efficiency.

The ISBPs are maintained in the ACD/IVR (automatic call directory/integrated voice response unit), claims management and database systems. In most cases, the processes interlink between the different systems and provide a large amount of measurable data that is monitored hourly, daily, weekly and monthly. The metrics are usually grouped together as inbound metrics, during-call metrics and staffing metrics.

The most common data examined for inbound metrics includes:

  1. Inbound Interactions by Time Period: Measuring the inbound interactions by time period allows call centers to be properly staffed for call volumes. Being understaffed will, of course, cause a spike in average hold time, abandoned interactions and an increased volume of repeat calls.

For example, an abandoned call by a repair facility adds two additional inbound calls: the contract holder and the shop calling again. This cycle compounds the issue of the CCC when understaffed. Measuring by both short and long time periods allows call centers to prepare for periods of increased call volume, based on different variables, such as seasonality and holidays.

  1. Staffing Metrics: In conjunction with measuring call volume, it’s also important to measure staff efficiency. The staffing metrics that should be monitored are schedule adherence, agent occupancy and agent utilization rate.

Schedule adherence measures the agent’s adherence to the published work schedule. Agent occupancy is the percentage of time that the agent is connected and ready to answer a call compared to the number of hours at work. Agent utilization measures the percentage of time the agent is available to take a call in relation to their occupancy.

The CCC goal should be no less than 90% in each of these measurements. Continual measurement of the staffing metrics daily, weekly and monthly will help to identify the proper staffing levels needed to meet your service levels and avoid the unnecessary expense of overstaffing.

  1. The Average Speed to Answer (ASA): The ASA, which measures the average time for an agent to answer a call once the call has entered the ACD/IVR system. The ASA will also vary depending on the call flow and the peak call volumes by time period. This is the most common metric required in contractual service levels and is quoted in a percentage by time period, for example 80% of calls answered in 60 seconds.
  2. The Average Time in Queue (AQT): AQT measures the time a caller spends in a particular queue. This is an important measurement when using self-service menus to understand how much time customers are willing to spend using the feature.
  3. The Average Abandonment Rate (AAT): The count of abandoned interactions when divided by the total number of inbound interactions gives you the abandon rate. This is reported in a percentage and may also be included with contractual service levels. The most common goal is less than 5% of all calls abandoned. Remember, a high abandon rate will drive additional inbound interactions for the same claim/customer.
  4. Call Metrics: Two of the call metrics most commonly monitored include average handle time (AHT) and average talk time (ATT). These similar metrics are many times used interchangeably, but are in fact very different.

The AHT measure the talk time and the after-call wrap-up time. The ATT measures only the time the agent is engaged in talking with the customer. Different types of callers will dictate the length of the call. For example, a client calling to update the address on the file will take a shorter time period than a repair facility calling in a multiple-line claim. It is important that you measure the different types of interactions and report on them accordingly.

  1. Claims Processes Dictate Performance: The basic call and claims processes govern the actions of the adjusters, customer service representatives and payables personnel. Effective claims process detail the steps needed to onboard, process and finalize a claim. Other process will govern the customer service and escalation process.

These processes are measured with daily, weekly and monthly scorecards for individual agents and different teams. These scorecards will typically measure the number of interactions, completed claims, schedule adherence and other standard call metrics. Processes should be documented and communicated to each agent for consistent claims adjudication and customer service results. And there are additional measurements in the claims process that are independent of the actual phone call or cost of the claim, such as a vehicle inspection.

The first question that must be asked is, “Should an inspection be requested?” At EFG Companies, the inspection is used to assist in documenting the reason for a large or delve into why a claim with a questionable failure is being approved. The vehicle inspection should never be used as a tool to try and deny a claim.

The next questions asked is, “Does the vehicle need to be inspected?” This varies on the coverage in the service contract, length of time the contract has been active, and the reported cause of failure by the repair facility. In some cases, the additional downtime and expense associated with the inspection may be substituted with clear photos provided by the repair facility. Instances for shop-supplied photos may be used to rule out a suspension lift or collision damage contributing to the cause of failure.

To measure inspection success, look at the number if inspections ordered by an agent. Depending on the skill level, some agents may be looking for additional documentation when they are not familiar with a certain failure or repair. We use a team method to transfer inspection claims to expedite the process.

Controlling Costs While Maintaining Service Levels

When looking at the expense of a mechanical claim, the parts and labor expense are usually about equal with both costs rising each year. One way to control costs while still maintaining the highest level of service is to use parts from alternate sources. These like-kind-and-quality (LKQ) parts often offer an average savings of over 25% from the OEM supplied parts. They also often carry the same, and in some cases longer warranty periods.

At EFG, we have several products that allow for this substitution. Because of buying power, the parts suppliers provide us a longer part and labor warranty than the OEM or repair shop usually offers. Even with an additional expense of shipping and a rental car (if applicable), we have managed to lower our parts cost, maintain high customer satisfaction, and transfer future risk at no additional overall cost to the programs.

Labor cost per hour is also rising year over year. To assist in maintaining the acceptable level of expense, adjusters should verify the diagnostic and repair time with the times listed in the national standard labor time guides. When the repair facility asks for additional diagnostic time, the adjuster will assess the validity by looking at the total lines per repair order, and the complexity of the repair. If the mechanic has spent time running numerous diagnostic tests and measurements, the claims process should allow for the claims adjuster to approve the diagnostic time without escalating the call to a supervisor.

Although there are some programs that define a stated maximum cost per labor hour paid, the majority of the programs allow for the market or door rate of the repair facility. An observed best practice is to review the rates using a labor rate survey by geographic region and type of repair facility annually and adjust rates if requested by the repair facility.

Beyond the measurable call and claim metrics, dashboards and reports, the attributes of the call are also very important to monitor. Agent satisfaction is as important, if not more so, than customer satisfaction. The caller will have a preconceived set of expectations, which will vary by the type of the caller. Although our industry requires the CCC staff to have a technical background for the claims adjudication, the expected soft skills of the call handling are still required.

While it is a common practice for companies to measure employee satisfaction, the most commonly measurement method is to distribute an annual employee survey. However, there are many different avenues available for companies to encourage employee feedback on how the company is doing, such as with informal meeting and through training.

In addition to employee feedback, it’s also vital to provide positive outlets for agents working with mostly upset customers. The typical agent will reside in cubicle within a call center. They have a sedentary job dealing with customers who are upset or stressed because their vehicle is not working properly. These upset customers want their vehicle fixed immediately if not sooner. This stress, even from the most polite customer, can be draining on the agent.

To combat this, it is the responsibility of the call center leadership and the company to provide avenues of positive energy to the agent. That positive energy will then be transferred to the customer and reduce the stress of the situation. This is the link between the agent’s satisfaction and the customer’s satisfaction.

So how does the company foster high agent satisfaction? Environment is a key. Is the agent in a shared workspace with a different shift, or a dedicated space? Can the agent have personal items at their workstation such as family photo or favorite sports team schedule? These types of personal items make the agent feel relaxed.

Shift scheduling is also important, even though not everyone will have their ideal shift 100% of the time. Shift bids, ability to swap schedules to accommodate an outside activity, are very important. A new trend with scheduling is the ability to work from home part or all of the work week. This works well with certain personalities and the experience at EFG is that the individual agents’ metrics meet or exceed the metrics when located in the call center. For large operations, this also saves on the amount of workstations needed.

Managing Customer Expectations

Before contact is made, the customer already has set expectations. The ability to meet these is what determines the length of the customer life cycle. The basic expectations when calling include:

  • Not getting a busy signal,
  • Ability to speak with someone without navigating through layers of self-service menus,
  • Low hold time,
  • Not being transferred from agent to agent,
  • Not being rushed and
  • Correct answers.

For the last several years, the traditional call center has been transformed into a “contact center” to meet the desires of the customer to contact companies through Internet chat or email. Even though the method of contact has changed, the expectations remain the same: quick response, clear and concise language and links for additional helpful sources of information.

To meet the standards of a world-class contact center, the customer expects the following at each time of contact:

  • The company to be accessible when the customer calls,
  • To be treated with respect and courtesy,
  • To find a solution for their need,
  • For their time to be respected,
  • To be well-informed about the product,
  • For everything to be done right the first time,
  • To be told what to expect,
  • For follow-up as promised and
  • For the company to be honest and ethical.

Although these expectations seem fairly simple, without the proper agent training and claims process to follow, the customers’ expectations will not be met. These expectations are grouped into a larger category referred to as “soft skills.” Soft skills are critical for agents who are in regular contact with your external clients, and they are commonly overlooked in the interview, selection, and training processes for new agents.

There are also important external metrics that rely solely on the perception of the customer calling in. Some management teams refer to these measurements as the “moment of truth.” Was the caller completely satisfied? Was this a first-call resolution? Only the customer can answer these questions.

So how is this measured? In 2015, several new technologies became available for call centers to measure voice inflection. The software performs live analysis of the changes in the caller and agent’s voice and can give a visual alert to the agent and a notification to the call monitor that there is an upset caller. The technology is also advanced enough to listen for required disclosures and notify the agent if they have not informed the customer. Other monitoring systems can identify if a caller has asked to speak to a supervisor, or suggested other escalation key indicators.

Post-call surveys are a critical asset in determining satisfaction and efficiency. If all of the customer’s needs are met, then it eliminates the need for them to call back. If we do not measure this, and only look at the inbound call volumes, we could misread the need for additional staffing. This increases costs and reduces profits.

Post-call surveys are delivered in a variety of methods. IVRs can give the customer the ability to opt in for a short survey following the call. Other call centers will send an email or paper survey to the customer. Whichever method you use, the survey results should be included in your overall metrics reporting.

Benchmarking Success

We have discussed the many measurements needed for an efficient and profitable operation, however, how do you know if you are doing a good job? Benchmarking your operation against other similar operations is critical to understanding what you are measuring. There are both formal and informal methods to benchmarking.

At EFG, we invested the time and effort for formal benchmarking annually. This provides the operations leadership the ability to measure our performance within the claims industry and maintain world class levels. This also allows the leadership team to learn new methods, industry trends and best practices from the experts in the field. The following metrics are part the standards for EFG Call Center Performance:

  • Our average speed to answer claims calls is :22 seconds.
  • Our average claims call handle time benchmarks at 3:50 minutes.
  • 67% of our total claims are one-call claims.
  • 96% of all claims are paid by corporate credit card within one hour of receipt of invoice.
  • Our claims adjusters average 15 years of experience and are themselves ASE-Certified.

Some of these values exceed industry standards, but all our achievable with the right training and enforcement. Although measurement takes time of the leadership staff, the rewards of efficiency and effectiveness are overwhelming.

Agent satisfaction increases customer satisfaction. Customer satisfaction reduces contract cancellations and increases future sales on their next vehicle. All of these factors lead to increased revenue and return on investment from a world-class claims and contact center.