Grange Insurance Pumps Premiums With Speech

The Georgia Insurance Information Group¹ reports that annual U.S. insurance premiums reached over one trillion dollars in 2003. Breaking the total 2003 premiums into two categories, the property/casualty sector totaled $574.6 billion and the life/health sector totaled $480.9 billion². While the average insurance expenditures for 2003 were estimated to be a 7.3 percent increase over 2002 and 2004 totals were 3.8 percent over 2003, the Insurance Information Institute estimates a rise of 2.5 percent for 2005 averages - the smallest increase in six years.

Homeowners insurance alone accounts for approximately 11.3 percent of all property/casualty insurance premiums as well as 23.3 percent of personal lines insurance¹. According to the Insurance Information Institute², "the typical homeowner's insurance policy covers damage from a fire, windstorms, hail, riots and explosions as well as other types of loss, such as theft and the cost of living elsewhere while the structure is being repaired or rebuilt after being damaged." (See Figure 1 for the different types of damages covered by the homeowner's insurance policy, which are broken into percentages of claims over a 20-year period.) So with more than 381,000 insurance sales agents in the U.S. alone, there are many options for insuring your belongings and loved ones as well as many ways of gaining access to those insurance coverage firms³.

One such insurance firm, Grange Insurance Group, has been covering families on farms and in small communities in six western states (Washington, Oregon, Idaho, Colorado, Wyoming, and California) since 1894. The company dates back to 1893, when the Washington State Grange met in the hayloft of a new barn in White Salmon, Wash. and resolved to start a fire insurance cooperative. On April 4, 1893, business commenced and the Washington Fire Relief Association's insurance was in force. In 1936, the association changed its name to Grange Fire Insurance, which would expand its services to include casualty insurance in 1943 and become Grange Insurance Group. Their commitment to serving families and "Main Street" businesses has helped Grange grow its business to more than $220 million in written premium and 160,000 in force policies.

It was through an existing relationship with Tata Consultancy Services (TCS) that Grange was approached with the opportunity to be involved with Microsoft in a speech technologies Joint Development Program (JDP) on its first generation Microsoft Speech Server. TCS and Grange had a number of meetings to examine the various applications already implemented at Grange and those available from outside sources. Grange was seeking a solution that would answer basic billing questions of insureds and mortgagees and allow them to reach customers without computers or high speed Internet connections. They eventually agreed to deploy speech in Grange's customer service department for billing inquiry. When deciding upon a platform, Grange went with Speech Application Language Tags (SALT) because it allowed them to leverage industry-standard hardware; familiar developer tools with a broad developer base; and their existing Web infrastructure. They also viewed the SALT environment as a secure, scalable, and reliable design that offered a low-cost application development, deployment and maintenance approach.

The goals for developing the speech solution included reducing the workload of the customer service representatives and to provide answers to basic questions from customers 24 hours a day, seven days a week.  Grange also wanted to attract high quality agents by providing access to corporate services while laying the foundation for voice channel utilization for other solutions in the future. So, in July 2004, Grange implemented the Microsoft Speech Server with an Intel dialogic card in an enterprise server configuration.

Enterprises Kick up Support with Launch of Microsoft® Speech Server 2004 R2 Enterprises are taking the implementation of speech on the Speech Application Language Tags (SALT)-based Microsoft® Speech Server to the next level, working with Microsoft® to integrate a multi-language platform to offer callers the option of English, French or Spanish for prompt and dialog transactions. This platform is the recently released Microsoft® Speech Server (MSS) 2004 R2. With MSS 2004 R2, enterprise customers can offer language support for U.S. Spanish and Canadian French. Customers can also deploy MSS 2004 R2 in an all-in-one server configuration. The new language support will address enterprises' needs to serve Canadian and U.S. multilingual callers by deploying speech-enabled applications designed for Canadian French, U.S. Spanish or U.S. English speakers. The new automated speech recognition (ASR) and text-to-speech (TTS) engines are provided in MSS 2004 R2. With these enhancements in place, the list of customers deploying MSS 2004 R2 not only includes Grange Insurance Group, but also Landstar System, Inc., TALX Corp. and Woodforest National Bank. The new MSS 2004 R2 Enterprise Edition will continue support of distributed multi-server deployments, which are recommended for implementations requiring more than 48 ports. Part of the Windows Server System™, MSS is a Web-based, speech-enabled Interactive Voice Response (IVR) and multimodal application solutions platform. As a SALT-based platform, Speech Server follows the Web application deployment model, using an ASP.NET-based Web server as the application server. The two main core components included with Microsoft® Speech Server are the Telephony Application Services and Speech Engine Services, including ASR, TTS and prompt manager. In addition, the MSS 2004 RS has expanded telephony board coverage and Voice over Internet Protocol (VoIP) support from industry partners such as Aculab, Brooktrout Technology, Eicon Networks and Vail Systems Inc.

Since then, Grange has consistently seen less than 10 percent of insureds and agents using the speech application ask to be transferred to a representative.  While not currently tracking customer satisfaction figures, they did roll out a survey during the testing phase to policyholders and found that more than 85 percent said that they would use voice recognition again.  The testing phase also included several months of recognition testing, stress testing, call flow testing, and data validation. Through this testing, Grange discovered that the use of DTMF was needed at certain prompts throughout the application. For example, one of Grange's prompts asks the user to speak their policy number.  Since the policy numbers are often alphanumeric, they found that the recognition rate for this prompt was not high at first.  To increase the recognition rate, Grange altered the grammars and offered the user the option of keying the policy number via DTMF for this prompt.  The combination of the two worked extremely well.

During implementation Grange encountered challenges with the prompt structuring and recognition failures that led to alterations; specifically, the policy number prompt presented a challenge for several callers. The grammars for this prompt were modified and offered the caller the option of using DTMF, which resolved the issue. 

None of these challenges required modifications to the speech platform.  In fact, Grange benefited from the SALT platform with the ability to tie existing applications through the back-end Web infrastructure.

The application itself is designed to offer the caller the option to speak to a Grange representative at key turns during the call.  It filters out some of the basic billing inquiries that come into the customer service department with less than 20 percent of callers requesting to be transferred out to an agent or being redirected by the system to an agent, which reflects Grange's goals to free up representatives to handle more complex calls rather than replacing the existing CSR's.

Grange is currently developing a multi-language platform to offer callers the option of English or Spanish for prompt and dialog transactions.  The platform is based on Microsoft's latest release, Microsoft Speech Server 2004 R2.  They are evaluating the possible expansion of speech which could include additional billing options and outbound potential as well as online payments, claims reporting and an agent locator. The expansion of the billing options could  include billing history, prior billing amounts compared to the current amount due, and full-term premium - as Grange's current application gives only current billing information, this could offer customers access to prior billing information, previous payment amounts and dates, and the total premium the customer still needs to pay (full term balance), while the outbound potential could  help direct insureds to their local agent, notify agents and insureds of company changes, and circulate Grange marketing campaigns through agents. The online payments could afford callers the option to make an electronic payment utilizing voice recognition if their payment is past due.  Callers could also report claims using speech recognition to gather information such as name, policy number, type of policy and when the loss occurred. It could potentially provide the caller with assistance during the claims process by interfacing with current databases.  The system, if requested, could also dial 911, a tow truck company, etc.  Finally, the agent locator is an existing feature on Grange's Web site that could be enhanced with speech to give callers the option to search for a local agent using their zip codes.  Grange sees substantial benefits in each of these possibilities. As these possible solutions are still in the evaluation stage, it is too early to pinpoint the exact plans for the future - except to say that the speech applications worked well to meet the company's goals and will continue to be a source of customer self-service moving forward.

¹Georgia Insurance Information Group (GIIS). The Insurance Industry Globally, Across the U.S.A. and in Georgia. Retrieved May 20, 2005. www.giis.org/giis/giis_pc_facts.shtml.

²Insurance Information Institute. Catastrophes: Insurance Issues. Retrieved May 19, 2005. http://Iiidev.iii.org/media/hottopics/insurance/.

³U.S. Department of Labor: Bureau of Labor Statistics. Insurance Sales Agents. Retrieved May 18, 2005. http://www.bls.gov.oco.ocos118.htm/.

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*Special thanks to Ryan Thorsness, business systems specialist at Grange Insurance Group, for all of his help in coordinating this article.

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Stephanie Owens is the associate editor for Speech Technology Magazine. She can be reached at stephanie@amcommpublications.com .