The first six months of 2010 have witnessed an exceptional number of natural calamities – the devastating Haiti and Chile earthquakes, the eruption of the volcano Eyjafjallajökull in Iceland, storms and floods in the United States, flooding in Central Europe, and winter storm ‘Xynthia’ in Western Europe and the Canary Islands. These disasters have resulted in billions of dollars in losses, in addition to a staggering number of fatalities. According to Munich Re’s GeoRisk Research, as many as 440 catastrophic occurrences were registered between January and June 2010, and overall losses of USD 70 billion have been recorded worldwide.
With each natural disaster, settlement claims inundate insurance firms, and the spike in calls needs to be handled swiftly and effectively. A system needs to be put in place to ensure claims are settled without delay, irate customers are managed efficiently, and there is no instance of abandoned or unanswered calls. In my opinion, it is not just the risk of financial loss that insurance firms face, but also that of reputation loss.
The most efficient way to handle spikes and reduce reputational risk is through an offshore strategy. To give an example, if the onshore location is flooded and employees cannot reach their place of work, the Business Process Outsourcing (BPO) partner can be used as an extended arm to handle calls.
A BPO services provider can offer the following benefits through Catastrophe Management:
- Reduced recruitment, hiring and training of staff
- Increased focus on core competencies
- Decreased operating expenses
- Utilization of technology, expertise and specialized skills with regard to claims processing
- Enhanced customer satisfaction
- Increased revenue growth
While most companies do have a Business Continuity Plan (BCP) in place, it strangely does not include Catastrophe Management. There is no blueprint to handle a catastrophe, however I give below an action plan which was utilized effectively by WNS for a key Insurance client during the Europe floods of January 2010. As an offshore BPO services provider, WNS utilized its talent pool across product lines to manage this catastrophic event and minimize impact on the end-customer.
Step 1: Resource Re-allocation
To counter the crisis effectively and handle the spike in calls, WNS utilized 35% cross-trained and tenured resources to step in and manage calls.
Step 2: Revamp Resource Utilization
- WNS offered an additional one hour production on a daily basis during the period of the catastrophe. The company also volunteered working on weekends.
- Proactive management of leave was organized, including calling back / canceling non-urgent leave.
- Utilized all operation assistance staff (including the quality team and supervisors) to manage the increase in call traffic.
Step 3: Proactive Alteration to Process Steps
Using the results of the call driver analysis and ability to monitor incoming call patterns, WNS was able to proactively divert select supplier call queries. These were diverted to the system / e-mail route and allowed for the answer of end-customer calls faster.
A catastrophe can be the true test of an organization’s ability to provide customer support with quality service levels. An organization must effectively meet the challenges of exceptionally high claims volume and call rates, while adhering to compliance requirements and cost-effective resource management. I would recommend Catastrophe Planning and Management as part of the BCP of an organization. Utilizing the services of an experienced BPO service provider is a clear way forward.
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