Life, Annuity, and Investment Products Leader

Improving Operational Effectiveness in Annuity Client Services

A leader in life, annuity, and investment products for individuals and employers recently asked for our assistance in delivering rapid process improvements for their annuity client services area. Nolan engaged in a three-month effort that resulted in savings in excess of $2 million on a $10 million budget.

The Need For Change

Over the past four years, our client had undergone several reorganizations, finally consolidating several disparate operations and acquired businesses. Significant process improvements were then implemented to adjust for changing sales volumes, intensified expense pressures and growing market competitiveness. These efforts delivered more efficient services, but the rate of change and impact were both too gradual to meet business needs. Given our client’s urgent need for accelerated and dramatic improvement in terms of expense reduction, combined with distribution pressures to transition from a functional to a customer-oriented organization, the decision was made to partner with the Robert E. Nolan Company to accomplish these objectives. The immediate goals were to eliminate $2 million in expenses and transition to a client-centric service model in support of a new service strategy being implemented company-wide. The project was set to focus on the high-potential customer-facing areas and the surrounding transaction processing teams. The project followed a sequence of deliverables, each building upon the prior one:

  • Selection and role definition for the Core Team and Steering Committee.
  • Establish goals to achieve the $2 million target reduction in expenses.
  • Identification, quantification, and mapping of key services and transactions, creating a common foundation of knowledge for group members.
  • Redesign of processes and transactions, striving for innovative, out-of-the-box ideas that would accomplish the stated objectives.
  • Organization, consolidation, and evaluation of the redesign and improvement ideas, resulting in a list of quantifiable, actionable, and achievable recommendations.
  • Creation of an implementation plan outlining the steps necessary to accomplish each recommendation, noting responsible parties and measurable milestones.The workshop process was scheduled for completion in a 12-week timeframe, with the 13-member team jointly presenting the finalized implementation plan. With the Core Team containing representatives from all of the potentially affected areas, organizational buy-in to the recommendations was assured.

Summary Findings

  • The process improvement ideas generated during the workshop redesign sessions showed a number of commonalities:Transactional specialization, backlogs, and limited training were creating handoffs, delays, duplication of effort, and even a few extraneous units—all adding to the expense structure and detracting from service quality.
  • Misalignment of staff and processes, in part the result of incremental and segmented organizational growth, was causing inefficiencies and clouding ownership—in effect, erasing individual account-ability for completing a service transaction in totality.
  • Focus on benign call center, without counter-balancing focus on off-phone transactions (often found to be the source of the calls) was resulting in “over servicing” of the phones and failure in completing customer service requests.
  • Resource mis-utilization (a direct result of being limited to single job grades for entire functions with minimal service request segregation) was resulting in higher compensated staff servicing the simplest to the most complex requests indiscriminately.
  • Surplus staff serving limited or archaic purposes within the context of the current organization and its needs (likely from changes in direction and prior rapid reorganizations, found throughout the organization) was perpetuating inefficiencies associated with validating the roles played.


After 12 weeks, the Core Team brought its sponsor and the Steering Committee a series of implementation plans supporting 14 distinct recommendations. These recommendations were set to knock $2.2 million in annualized savings off a $10 million budget in less than one year. Key aspects of the 14 recommendations included:

  • Eliminating specialized, handoff-oriented units by placing responsibility for completing a transaction with the original person receiving the request.
  • Adjusting service standards, coverage hours and off-phone time management to reflect a combination of optimized resource utilization and customer service expectations.
  • Consolidating similar transaction processing units so that all like transactions are processed in the same area, under a common once-and-done framework.
  • Implementing a transaction and call tier structure that aligned simpler calls and requests with lower-cost resources while focusing experienced staff on more complex requests.
  • Restructuring the training process and supporting curriculum to expeditiously put new staff in productive, but limited roles, then following up with recurring and subject-matter-specific training modules.
  • Redefining managers’ jobs to focus on staff development, service monitoring, quality checking, and problem resolution while removing and centralizing some non-core, administrative activities.
  • The team also produced 12 ancillary recommendations that involved other areas or focused on unmeasured organizational improvements. While no financial value was associated with these recommendations, an additional $1 million or so to the bottom line over time is estimated.

The Future

In the four-month project, the Core Team successfully defined a set of recommendations that would generate over $2.2 million in expense savings over the next six to nine months. An organizational structure that focused on first-call resolution and once-and-done processing was developed to position the service area for growth, while ensuring efficient and effective customer service. Job tiers and career paths were outlined that benefited employees by providing growth opportunities associated with rewards, while better matching the cost of resources with the complexity of the transaction.

One of the senior leaders of the steering committee asked the team if the process they had undergone was one they had learned from and would be able to duplicate on their own in the future. Every member of the Core Team answered in the affirmative, many vigorously. The combination of meaningful change, measurable benefits, and knowledge transfer came together to deliver bottom-line results.