New York – Described as the most frequent touch point that most insurers have with their customers, billing and its associated technology has taken center stage lately, as carriers evaluate existing systems to determine whether they are a catalyst—or deterrent—for growth.
A new report from New York-based
"Insurers need to support multiple channels, new payment methods and more flexible plans that allow different segments and distribution channels to serve their markets effectively,” notes Matthew Josefowicz, director of the insurance practice. "Unfortunately, legacy billing systems are often not up to the job."
According to Nimish Sankalia, senior VP of
“Ultimately, it's all about the customer, and billing provides a chance to personalize the interaction between the carrier and policyholder,” says Sankalia. “Whether it's a returning customer or a new one, every process and system—front office, back office and enterprisewide—must serve policyholders' needs. With that in mind, the desire to improve customer service remains a key driver for IT spending among insurers, especially in the property/casualty sector.”
Bolstering that argument, Karen Pauli, a 25-year insurance industry veteran who now serves as an analyst with
Josefowicz says the good news is that most of the vendors in this space have realized that ease of integration is a critical element to a billing offering.
“Billing systems need to be able to accept data from multiple systems, including all vintages of policy admin systems and financials systems, and to be able to share data back to these as well as with document automation and e-business systems,” he says. “The newer systems on the market have been designed with this in mind, but most of the older, COBOL-based systems have been updated with services-based integration layers.”
Pauli describes billing technology as having a “lights on” capability. “If a carrier does it badly, it’s at a reputational loss,” she says. “Consumers expect that it will be done correctly. However, the choice issues are becoming a critical point, and leading vendors with new technology can provide those choices for billing.”
Fortunately for P&C insurers, the market for billing systems has expanded over the past two years—there are now 12 major systems vendors offering solutions, of which five are either new entrants or recent acquisitions of small companies by larger players that are giving them more market momentum and credibility, Josefowicz says.
“And unlike other classes of enterprise insurance software where the market is active only among smaller companies, many of the current vendors have successfully proven their solutions at the largest companies,” he says.
Such is the cas at
And Middleton, Wis.-based
Other technology providers are entering the foray, says Josefowicz, who says his report,
"Novarica Market Navigator: US P/C Billing Systems 2008 (Q1)", is designed to help interested P&C insurers rapidly understand their options in this market and draw up their short-list of vendors for in-depth evaluation. The report is based on factual responses to a universal request for information (RFI) distributed by Novarica, and subsequent conversations with the vendors to validate and confirm responses, adds Josefowicz. The RFI covers details of organization, technology stack, client base and key functionality.
Sources: Novarica, TowerGroup, INN archives
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