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Ever wondered how much time and money stress testing could save your business?

18th May 2020

Ever wondered how much time and money stress testing could save your business?

When I train people on designing services, I often find they don’t understand what is meant by “stress testing”.

Well, we are seeing a great example of the value of stress testing in our daily lives right now! Put simply stress testing means looking at how you will continue to provide service should something happen that means your team will be stretched.

What would happen if there was a sudden increase in the need for your service, such as an event that could cause a lot of claims?

What would happen if something happens that could stop the service provider from providing service? For example a bomb scare nearby means no-one can get into the office to answer the telephones.

What would happen if something in the wide world stopped you from following your normal process and you had to make changes? How would you make sure your customers can still get the service they need?

I was working for Eagle Star in 1987 (as a property underwriter) when the 1987 great storm hit the country. We suddenly had many customers with damage caused by falling trees, making claims. I remember being given a “claims checklist” and was asked to help with processing claims. Two things helped us deal with the situation so we were able to meet our customers’ needs:

  • All staff helping out with checklists and guidance to make speedy decisions.
  • A review of processes so that the claims process was streamlined.

I wonder how many of us are finding that insurers dealing with claims in the current pandemic, have stepped up. I hear many stories of people who made claims in March and now (two months later) have yet to receive any reply, other that a standard “we are busy and trying our best” text. Even worse, I have heard stories of some who have claimed with an explanation of why they cannot get a refund and with supportive evidence and then getting a standard “you must try for a refund first” response.

Many of these people making a claim will have lost their jobs or taken a cut in pay, waiting for a claims payment is adding to the stress they are feeling. I suspect many of them started out understanding they would have to wait a little longer but are now starting to wonder what the point is of buying the insurance cover. This does no good for our industry's reputation. 

So let's think a bit more about stress testing and understand how it could better help our industry deal with the current pandemic. 

Let's look at the 6 steps in building and testing scenarios.

Step 1 - Identify

You start by creating a list of all the things that could go wrong. If there’s one thing the Covid-19 pandemic has taught us (well two let’s not forget the importance of kindness) it’s that what seems the stuff of a Hollywood film, can actually happen.

Step 2 - Examine

Now, for each scenario, walk through the process to see how it is affected and what may be needed.

A great example (we are seeing right now) is where you know staff will not be able to get to work. You need to think about what is needed to get people set up at home. I have heard examples of people getting a laptop delivered by their employer straight away and others who had to wait 7 weeks for a laptop.

I'm not sure why there was a 7 week wait. Maybe the firm struggled to get supplies? Maybe their IT staff couldn't keep up with the workload to set up the company systems and security on the laptops.

Step 3 - Build

This is where you build your back-up process. Work out what is needed and how you will get it done. It is important to sit down with others and challenge your expectations. For example, if you will employ extra people, how will you quickly find suitable staff and go through the necessary checks to employ them? How easy is it to buy, set up and deliver 1,000 new laptops?

Step 4 - Test

Then you test. Walk-through it. Try it out. Get others to review and test it for you. You need to try and break the process, try and find the weak links. 

I recall a friend working in event management telling me they were asked to test what they would do if half the staff, providing service at an event, suddenly became ill midway through the event. The proposal (they were testing) was to reach out to recruiters. Testing revealed there would be no time to go and find new staff and it would be about re-organising the staff they had…. quickly. 

Step 5 – Communicate

You need to make sure everyone understands what they must do if the scenario occurs. You also need an easy way to quickly communicate with staff. This is usually via text so it’s important to make sure this contact information is up to date and securely stored.

Don’t forget if any of this information is on your system, staff may not have access to it or it may not always be available to you.

You should also have dry-runs, where a scenario is imagined and you see how well staff and systems can deal with the back-up plan.

Step 6 – Review and refresh.

It is important to regularly review and update your scenarios and actions. Technology is always changing. If Covid-19 pandemic had happened 10 years ago would we have found it so easy to continue working remotely as teams? Our plans nowadays are very different to what they were 10 years ago. 

Don't forget the importance of making sure your outsourcers have stress tested. You need to make sure they can continue providing your customers with the service they need.

I hope you now understand the importance of scenario planning and testing and how it can be done. Do message me if you have any questions or want to find our more about my courses. 

Author: Sally Pearce (Conduct Matters Ltd)

Sally Pearce started Conduct Matters in 2014 after 35 years working in the insurance industry. She was originally an underwriter, but since 2000 has worked in dispute resolution and helping Insurance firms understand how to treat their customers fairly. Her experience includes working for the Financial Ombudsman, in the Lloyd’s market and dealing with regulators. Sally is ACII, a qualified mediator and yoga teacher. She is also available for public speaking.

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