When you go down a checklist of the benefits a new billing system might bring to your company, customer service may not show up very high. But Matthew Josefowicz, manager of Celent's global insurance group, believes insurers need to be aware of all the service levels a billing system provides and not think of it just in terms of pure collections.
He sees a growing awareness of the changing service imperative involving billing in the insurance industry. "If you look at the breakdown of calls that come into a customer service center, a high proportion of them have to do with billing issues," he says. "Anything you can do to increase accuracy, reduce complexity and errors, and give people a better experience with their bills can reduce the call center burden."
Josefowicz is the author of a recent study, "Billing: Business and IT Issues for P&C Insurers." He maintains billing is one of the few opportunities carriers have to touch customers directly, which is important in an industry that has largely indirect relationships with its end customers. He indicates one of the advantages of an improved billing system is as a way to remind customers who you are and that you are providing them a valuable service.
The issue many insurers have to deal with is multiple billing systems, often accumulated through mergers and acquisitions. "It's the same reason there's a large number of policy admin systems," says Josefowicz. "That can create an additional layer of complexity."
He points out there are two different strategies insurers can follow. One is to unify your policy administration systems and put multiple lines on a single system. The replacement of a policy administration system is a major project, however, so going instead with a replacement billing system is an easier and less expensive option. "Some companies are taking the first step with billing [systems] and figuring [a full policy admin system replacement] will migrate back up the chain later," he notes.
Many companies treat billing as purely a back-office function, observes Josefowicz. "It's strictly a cost center, so it tends to get underinvestment," he says. Nevertheless, he suggests carriers need to understand billing in its service context–what kind of customer experience is the billing situation creating, what kind of call center volume is it driving, and what kind of effect is it having on the agents? "In a lot of cases, especially in commercial lines, you are talking about situations where the real function of the billing system is to provide and accept clean data from the agents and not create headaches for the agents," asserts Josefowicz. "So, it becomes a distributor relationship issue, as well."
Customers expect more service from their insurance providers, Josefowicz contends, and this should drive improvements, too. "In a totally real-time world where you can track your FedEx package, change your airline ticket, and do those kinds of things online, to have online access to your statements and potentially initiate payments is a competitive necessity," he says. Such systems aren't likely to give a carrier a competitive advantage, he continues, but those carriers not offering these services are going to be left behind.
Insurers need to be aware home-grown billing systems can get outdated and become difficult to work with unless an organization and its IT department are dedicated to supporting, documenting, and enhancing them. "[Billing systems] typically are built to solve today's problems, but unlike most good vendor solutions that have continuous R&D behind them, most home-grown systems are built to address an immediate need, and by the time the system is complete and operational, the need may have changed," warns Josefowicz. "Certainly within two years, the need will have changed, and you will be saddled with another development or enhancement project."
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