Consumers have become accustomed to high levels of personalization online. Retail sites greet them by name, offer tailored product recommendations and track their order history. Online banking posts purchases in real time and even helps account holders track the charges against their family budgets.

It's not surprising, then, that consumers now expect a comparable level of personalization from their insurance carriers. This is particularly true for the number one reason policyholders contact their insurance carriers—with questions, comments and requests regarding their billing statements.

It's crucial for companies to resolve questions about billing and payments as quickly and efficiently as possible. That level of service is an important way for insurers to differentiate their brand. Billing systems are no longer just a matter of internal operational efficiency; they can play a critical role in supporting sales, customer service and retention.

Working with insurers on replacing and modernizing billing systems, we are seeing increasing demand for flexibility in both technology and billing processes. A growing number of insurers are exploring ways to offer policyholders highly personalized features such as mobile access, multiple online billing options and consolidated viewing of their premiums across all policies, including life, health, homeowners, auto, umbrella, and more.

By removing billing system limitations, carriers can improve operations and customer satisfaction, reduce maintenance costs and even attract new business. So what do insurers need to create a successful billing program? Here's a look at several new approaches and examples of how organizations are using them to take billing to the next level:

1. Consolidate Billing Systems—All of Them

Too many carriers maintain separate billing systems for each line of business or subsidiary. This results in multiple IT support teams across the enterprise, driving up training and maintenance costs, and inhibiting the development of billing best practices. Reducing redundant costs for systems and IT support can often justify moving to a single consolidated solution. Add on the potential customer service and brand enhancement benefits, and the business case becomes truly compelling.

For large multiline companies, the number of billing systems that could be consolidated is staggering—personal and commercial lines, life and health, claims recovery, membership fees, agent receivables, and external vendors—and the benefits they stand to gain are very compelling.

2. Give Customers What They Want, As Fast As They Want It

Customers want options in the way they are billed and the way they make payments. Insurers can gain competitive differentiation by offering a multitude of billing and payment options—options that can be deployed in weeks, not months.

GEICO, which has been recognized by Celent as a Model Insurer for Advanced Customer Billing Options, configured its billing system to increase the number of billing options it could offer to customers. The carrier can now rate, quote, and process all possible billing scenarios in under one second, while displaying the correct premium to the penny.

Today's customers not only want choices in billing and payment options, but also easier access to all of their policy information—any way they want. They expect real-time access, in separate or consolidated views. They also expect to be able to set their preferences online with an easy-to-use interface. Equally important, carriers must be able to keep the information provided through each channel synchronized—mailings, CSRs, websites, mobile alerts or agents—so policyholders always have consistent, up-to-date views of payments and premiums due.

Indiana Farm Bureau Insurance, for example, moved to a central billing system to offer personalized billing plans to each of its customers—an important service for farmers who might have more than 100 commercial and personal lines policies to manage. As an added benefit, the company's new billing software, with its consolidated view of the customers' policies, made it easier to cross-sell to existing policyholders, the source of about 80 percent of new business.

Technology changes rapidly—and so do customer preferences and expectations. Insurers need to be able to offer new options as they become available. For instance, most insurers are under pressure to offer online and mobile options for billing, payments and self-service—and that pressure is steadily increasing. A truly flexible system can support today's emerging apps, such as those for collecting payments and bill presentment through smartphones, tablets or other mobile devices, and leave the company well positioned to take advantage of the next wave of technology. Agent access to client portfolios, policy and billing via mobile devices enables agents to reply to customer inquiries anytime and anywhere. Billing questions still rank among the most frequent customer service requests.

3. Tailor Your System to Support New Strategies

The ability to tailor systems can be the key to executing new business strategies. For example, carriers can't offer personalized payment plans and custom EFT scheduling if their back-office systems don't support these features. Legacy billing systems, in fact, are often barriers to entering new lines of business and markets.

One national carrier, Federated Insurance, replaced its 30-year-old billing system with a new system that supports split billing and other capabilities aimed at helping large companies manage coverage for multiple businesses. Federated, which specializes in commercial insurance for midsized companies, now has the ability to deliver more customized services, helping it pursue larger commercial accounts with more complex billing needs.

4. Take Advantage of New Deployment Models

While moving to a single enterprise billing system can streamline processing and dramatically reduce system maintenance costs, it can be a difficult, risky and lengthy process. Opting for an alternate deployment option, such as a hosted solution or Software as a Service (SaaS) deployment, can greatly mitigate these factors.

A growing number of carriers concerned about the costs and implementation risks of moving their billing solution are showing interest in hosting options including cloud-enabled deployment with pay-per-usage pricing.

With these new deployment options, carriers can eliminate capital expense and the operational disruptions that come with lengthy implementations. Ongoing maintenance is no longer an issue, and continuous enhancements prevent technology obsolescence. Insurers can reap the benefits of modern billing systems sooner, introduce new billing plans faster and lower overall costs.

As the barriers to accessing a modern billing system fall, the same features used by top national carriers to help drive new business and increase customer loyalty are now within reach of any-sized carrier.

Achieve Your Business Objectives

In today's rapidly changing world, a modern billing system enables insurers to achieve business objectives faster. In the next few years, as new billing and payment technologies are embraced by consumers, insurance companies with outdated billing programs will be seen as slow and inflexible, which are universal turnoffs to customers, potential customers, and agents.

The bottom line is simple: Investing in a modern, flexible billing system more than pays you back.

Special Reports /

Innovation Overdue for Consolidated Premium Billing

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