(Image credit: Dollar Photo Club.)
Group life insurers are feeling the limitations of their billing capabilities and most are considering replacing their current systems with more up-to-date alternatives, according to a Novarica (Boston) study sponsored by FINEOS (Dublin). Among the findings of the survey-based study, Overcoming the Challenges of Life Insurance Billing, are that the majority of the midsized and large life insurers writing group and worksite products are considering replacing their billing systems within three years in order to improve billing accuracy and customer experience.
“In the competitive group life market, insurers are looking for ways to improve customer experience as a differentiator for their distribution networks and to better meet self-service demands of agents and policyholders,” comments Tom Benton, VP Research and Consulting, Novarica. “Billing is an important touchpoint with customers, and issues with bill accuracy and reconciliation are key drivers making billing system replacement a priority.”
While the biggest functional deficit noted by survey respondents was a lack of built-in analytics/reporting and workflow capabilities, the most important driver for replacement was the need for an improved customer experience. Respondents also prioritized related capabilities, such as improved quality of customer information.
Insurers reported dedicating increased funding for core systems projects and affirmed that billing replacement could take place within the context of a larger policy administration system (PAS) modernization initiative. Thirty percent of respondents expressed strong interest in a new billing solution along with their core system replacement, with plans to increase spending for both. Generally, insurers prefer either a standalone billing solution or a module within a new PAS. Carriers were more likely to be replacing an in-house built system with a packaged system rather than building a new one. Similarly, while a few respondents were considering a BPO solution on a speed-to-market rationale, they did not consider outsourced billing a long-term solution.
The study identified the following system priorities to support better customer service:
- Built-in reporting and analytics
- Integrated workflow capabilities
- Improved billing accuracy and reconciliation
- Consolidated billing platform
- Payroll billing capability
- Multi-channel delivery and electronic bill presentment
- Collaboration tools for agents/customers
“These findings tally with what we are seeing in the Life, Accident and Health market and validates our decision to invest in FINEOS Billing which we believe is the first billing product component designed to be used standalone, integrated to legacy administration platforms or as part of our own modern policy administration suite,” comments Michael Kelly, CEO, FINEOS.