Editor's note: This item is excerpted with permission from "Property Casualty Billing Systems – North America: 2021 Spectrum Report."
Billing continues to be an important part of an insurer’s customer service strategies. Billing is not purely a financial issue but has a significant role to play in the overall experience. After all, over the course of five years, a policyholder will have a single new business experience, four renewals, perhaps a claim or two (depending on the LOBs written), and 60 billing transactions—if they are on monthly billing.
Billing presents an opportunity to fulfill a brand promise of convenience and trust. But errors can be costly. These costs can be direct, as in the case of a mistaken cancellation or billing errors leading to increased call volume. But there is also an indirect cost on customer experience and retention.
Insurers are looking for several key capabilities when they determine whether to invest in a new billing solution:
• Improved customer experience. The prevalence of Internet purchasing and bill payment in other industries continues to increase the pressure on insurers to deliver web capabilities such as electronic bill pay and presentment, mobile transactions, and policyholder/producer portals. Many legacy systems “just can’t get there from here,” and updated technology must be introduced to fully enable these functions.
• Transparency. Progress is being made to deliver transparency across product lines. The ability to bill multiple policies on a single bill is still elusive for many with legacy systems or for those with multiple billing systems in production. The ability to see the equity date or to easily identify how payment might change with different payment plans is a growing need.
• Increased use of billing analytics. As the function transitions to a strategic service differentiator, different information is required to respond to new challenges. Billing reporting has historically been more operational in nature, reporting on number of invoices issued, average payments, number of days outstanding, etc. Questions such as “Are my current billing plans attracting profitable business?” and “What happens if I increase specific fees?” require analytics, not simply reporting. Vendors differ in their approach, some offering tools embedded as part of the base system and others providing utilities to extract information into specialized, enterprise analytic engines.
• Increased flexibility. Seeking new ways to differentiate, insurers are looking for the ability to easily add new bill plans, new payment options, and new ways of interacting with customers through the bill.
• Increased control. Seeking increased flexibility and speed, insurers increasingly want to control their own destiny and perform updates themselves. Some of these companies maintain a billing system in a traditional IT organization. Others seek to move some parts of the maintenance into end user areas.
