Technology has allowed single-state insurers to compete with national carriers, but when the national carriers can spend millions marketing their company to customers the smaller carriers need to find a niche that will retain their policyholders and possibly attract a few from the competition. For North Carolina Farm Bureau Mutual Insurance Company, the battleground was electronic billing.
“We were receiving feedback from our customers that they wanted electronic billing—the ability to go paperless,” says Linda Squires, senior executive of operations for NCFBMIC. “We had customers that wanted services that we were not offering online: accessing declarations, getting proof of insurance. The bigger picture for us was to stay competitive and meet customer expectations.”
Customers have expectations of going online to conduct transactions. NCFBMIC established a strategy to offer such service as a way to retain customers and offer a better level of service than what their competition was offering.
NCFBMIC already had an established relationship with BillMatrix, which is now Fiserv, but the carrier performed its due diligence by looking at four other vendors, their offerings, and their areas of expertise as far as delivering an electronic billing solution. Following a four-month search, NCFBMIC selected Fiserv in August of 2009.
At the same time, NCFBMIC was interacting with IBM to develop a new front end on the carrier’s Website.
“It was a rapid interactive process because we were live within six months,” says Squires. “We did take a slow approach in exposing [the system] to our employees and agency force. We wanted to make it perfect before we opened it to our customer base.”
In speaking with Fiserv, Anthony Neff, operations division manager for the carrier, was told to expect approximately 20 percent of their self-service customers going paperless, but Neff was happy to report that NCFBMIC is now over 30 percent.
As the carrier proceeds with a replacement of its policy administration system, Squires believes integration of the different systems will spark an even larger number of electronic customers for billing, but NCFBMIC is not trying to push its customers into a single method of payment.
“We are trying to serve every type of customer need,” she says.
Such variety is why insurance remains such an extremely competitive business, according to Squires.
“We want to grow our business, but we also need to retain that customer,” she says. “If you don’t deliver these types of services, customers are going to shop elsewhere. There are too many national companies that spend heavy dollars on advertising that we can’t afford. We monitored the feedback on our Website and we could see the increase in expectations to be online. We need to look at the next generation of customers and make sure we have what they expect.”
In addition to customer service, NCFBMIC has discovered several pleasing bonuses: savings from going paperless and not having to mail as many paper bills.
“It was a nice side effect, but it was not the driver in our business decision,” says Squires.
One of the challenges NCFBMIC faced was to make it clear to customers what their options were, explains Neff.
“We created a new payments and billing page as we redid our Website to explain the benefits,” he says. “The term e-bill may mean one thing to you, but it could mean something different to another customer.”
Having customers visit the NCFBMIC Website to pay their bills also gives the carrier more marketing opportunities.
“From a customer base, the overall acceptance rate was more than we expected,” she says. “Offering the billing options [online] is creating more activity as customers come to our Web site.”
Using the Fiserv product also meant that the vendor could host the billing solution and the customer data.
“We are not responsible for the compliance in storing credit card information,” says Squires. “Our core competency is selling insurance. They actually host and store the data. We prefer Fiserv take on that responsibility, allowing us to focus on our primary expertise—best serving our customers.”