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The excuse that insurers often use to explain their lag in customer-facing capabilities is that, compared to banking and other industries, they have relatively low frequency interaction with customers. That’s true, and yet insurers are comparatively slower to replace the capabilities that interact most frequently with customers: billing systems. Insurers naturally struggle with core system investment priorities, but they may fail to consider the urgency of achieving not only increased efficiency but also a customer experience in keeping with the times.
Though insurers are beginning to prioritize billing as part of their overall digitization and customer experience efforts, policy administration and claims continue to dominate carriers’ core legacy system replacement projects. In 2015, industry analyst reports broke down core system software deals as 50 percent for policy administration, 17 percent for claims and 13 percent for billing. Every insurer’s circumstances are unique, but many may be missing an opportunity to bring customer-facing capabilities into line with consumer expectations.
It’s not enough anymore to think simply in terms of consumers’ expectations being influenced by other industries, such as retail or logistics. Today customers live digital lives that set very high expectations for commercial transactions and service. They expect businesses to be able to be responsive to their needs and interact with them via their channels of choice without inconvenience. As the most frequent touch point for most policyholders, billing is an important opportunity for insurers to provide a customer experience in line with those expectations.
For most insurers, the greatest barrier to providing that experience is a legacy technology environment replete with excessive reliance on manual intervention and batch, as opposed to transactional processing. Modern billing technology simultaneously reduces the inefficiencies associated with legacy systems, while enabling a personalized experience and the kinds of real-time self-service options that consumers increasingly prefer.
However, for many insurers, billing remains an afterthought in modernization discussions. In some cases, insurers mistakenly think of billing as a mechanical administrative process rather than a vital policyholder touchpoint—or they simply may not know what to consider when evaluating their billing capabilities. The following questions provide a guide for evaluating whether an existing billing system meets current standards of efficiency and customer experience:
Can your system issue invoices without manual intervention? Many insurers’ processes require acquiring billing information from systems beyond their billing application. A good example is changes in policyholder or partner addresses, or changes in agency/broker/partner information. This leads to uncertainty with regard to the location of data, as well as the potential for human error at the data entry stage. Effectively, the billing system is not integrated with policy and claims systems, making a comprehensive, 360-degree view of the customer impossible. Modern billing systems can automate many manual processes through the use of business rules and workflow technology. This enables using manual processing an exception rather than the rule.
Can business professionals easily implement changes to your system? Within legacy insurance billing systems, many customer-facing processes are typically hard-coded—making it impossible for business personnel to make changes and expensive and challenging even for IT departments. Modern billing systems give carriers greater control over systems with flexible architectures that allow business users to make changes on-the-fly.
Does your system have ready access to pertinent data? At many insurers, much of the information relevant to billing is on paper rather than in information systems. Most legacy billing systems do behave as simple administrative applications, simply sending out bills and processing payments and not also taking into account the needs of individual customers. Modern billing systems integrate with other core systems and provide the means to track customers’ issues to resolution.
Does your system have robust reporting capabilities? The scant data access of legacy billing systems alluded to above also manifests itself in the inability to run reports. Carriers with legacy billing environments typically pull reporting data from multiple systems. They then manually assemble the data, introducing the possibility of human error. Modern billing systems provide full reporting capabilities, such as billing statements for monthly reconciliation, in addition to dashboards, pre-defined cubes, standardized reports, and ad-hoc reporting. These also provide important underwriting feedback, such as timeliness of payments, the extent of dishonors, etc.
Does your system incorporate both AP and AR? Often insurers depend on separate systems to process and track payables and receivables, which prevents a complete view of cash flow. Information may be stored in yet other systems or in actual filing cabinets, requiring billing clerks to spend time on administrative tasks rather than serving customers. Modern billing systems give insurers a complete, current view of cash movement and let insurers put their customers, distributors and partners first by providing flexible payment plans, methods (credit card, EFT, etc.) as well as self-service customer and business partner portals.
Negative answers to the questions above indicate the breadth of the gap between your current capabilities and the efficiency and customer experience possible with modern billing systems. Like other modern core systems, rules-based, configurable billing systems have the broad functionality and integration capabilities to significantly increase efficiency, reduce error, add financial transparency, and perhaps most importantly, deliver a competitive customer experience in line with consumers’ expectations. Insurers must modernize their billing operations to be more agile and customer centric. The challenge before you is to compare your system against the criteria above and then contact OneShield to discuss how you can enhance and improve operational and process efficiencies, strengthen service levels, and rapidly support new initiatives with the power of one solution.
Get your billing transformation underway. For more information about our OneShield Billing solution, or to book a demo, visit OneShield.com.