At a time when most carriers have heightened their focus on expense management due to economic conditions, we’re seeing anecdotal evidence that many of our customers are experiencing record-breaking levels of returned mail. These added expenses, along with increased potential compliance risks, result in poor customer experience and can create a perfect storm for carriers to manage.
Several challenges contribute to the returned mail problem:
All of these forces and more place a burden on life insurers. And it is a burden that they ignore at their own peril. Numerous industry studies have addressed the daunting cost of returned mail. A recent Pitney Bowes report estimates that the cost of returned mail varies by document, citing anywhere from $3 for notices, $10 for bills, and $25 for checks that are returned undeliverable and must be reissued.3 Despite these and all the other associated costs, the report notes that returned mail “remains one of the most tolerated profit drains in organizations everywhere.”3
Beyond the direct costs associated with undeliverable mail, it’s also important to understand the related compliance issues and risks. The Gramm-Leach-Bliley Act and state insurance laws can dictate delivery of annual privacy notices. Know Your Customer (KYC) regulations prescribe due diligence that companies must take to identify customers and protect against theft and fraudulent activities, and address discrepancies from returned mail can constitute a red flag for potential identity theft. Failure to adequately address these and other compliance issues can create liabilities, as well as reputational risks for the organization.
So how do life insurance companies avoid the profit drain, minimize liability and stay better connected with customers? Waiting until the mail bin is full of undeliverable mail is not the answer. The very first step in the process is to establish a proactive discipline around data hygiene. Analyze your entire policy database to identify customers whose contact information is inaccurate, then confirm their best address—and even add phone and email—to ensure that you have multiple ways to stay in contact with your customers. Once you’ve established that baseline, the next step is to set up a repeatable cadence of data updates to maintain good data hygiene.
LexisNexis® Risk Solutions provides Customer Data Management solutions that allow you to clean and normalize your data, link data across multiple business segments to create more robust and complete customer profiles, and get automatic updates of names, addresses, phone numbers and more. The process is simple, fast and customizable to your company’s needs. The ability to form a single, comprehensive view of your customer across disparate business segments can help you better understand all the touchpoints you have with that customer so that you can make informed decisions as you communicate. Not only will you resolve your returned mail dilemma, but you’ll also introduce operational efficiencies and gain a better understanding of your customer across your organization.
For more insights on returned mail, or for information about our Customer Data Management solutions, please call 1-800-869-0751, Visit Unclaimed Property Services by LexisNexis Risk Solutions or email firstname.lastname@example.org