San Mateo, Calif. — While P&C insurers may believe that billing has an impact on customer satisfaction and retention, many also believe that their current billing systems and processes inhibit their ability to provide superior customer service. In fact, few P&C insurers can support payments by credit or debit card, and some are so inflexible that functional enhancements are cost prohibitive and are no longer made, according to Guidewire Software.
Guidewire Software Inc., San Mateo, Calif., surveyed a range of P&C insurers in North America about the current state of their billing operations, how well current systems support their needs, and how they see their billing operations evolving in the future. Business and IT executives and staff members from more than 60 carriers participated in the survey.A report from New York-based Novarica maintains a similar view that using billing to create positive customer experience has become a competitive necessity, prompting carriers with legacy systems to reexamine their core billing functions.
"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,” says Matthew Josefowicz, director of the insurance practice. "Unfortunately, legacy billing systems are often not up to the job."The majority of Guidewire’s survey respondents (82%) manage billing as a centralized function that supports the entire organization. A centralized billing organization not only decreases administrative overhead, but also contributes to consistency across lines of business. There was a marked difference between large and small carriers in response to how many billing systems they use. While 86% of small carriers report use of a single billing system, only 25% of large carriers can claim the same. In fact, one-third of large carriers report using four or more billing systems throughout their organization.
The survey shows that challenges hold insurers back when it comes to billing. When asked to list top challenges with their current primary billing systems (via free-form text entry), survey respondents consistently highlighted the following:
• Difficulty and expense of system maintenance
• Difficulty of adding additional functionality
• Inability to quickly deploy new and updated billing plans
• Frequent complaints from agents when system encounters exception conditions and behaves in unexpected ways
• Little to no support for access by external agents
• Poor reporting capabilities inhibit visibility into business performance
Consolidation seems to be on the minds of many insurers—even health insurers. Little Rock-based BCBS Arkansas wanted to consolidate bills to create a single face to the customer, as well as allow them an automated process to receive and work with their billings. “The billing technology for those systems was not integrated, so there were situations when customers may be getting two, three, maybe four paper bills from us,” says Steve Spaulding, VP of internal operations. Rather than only replace or upgrade legacy systems, BCBS Arkansas implemented Benefitfocus eBilling.
BCBS Arkansas continues to send paper bills to customers and has chosen to manage the roll-out of the eBilling technology to make sure customers understand the functionality and get feedback for continued enhancements. “We don’t know if [electronic billing] will be the exclusive way customers will be billed in the future,” Spaulding says. “I tend to think there will always be situations where people can’t access electronic billing, but as long as it works well, we would hope that the market penetration would grow pretty fast over time.”
Knowing what the customers want is a tricky thing. For its survey, Guidewire’s asked P&C insurers a variety of questions about specific aspects of their current billing systems, including functionality, flexibility, age, technology platform, and maintenance. A few notable functional gaps will impact carriers’ abilities to deliver the services customers have come to expect:
• No support for credit card payments (54%)
• Difficulty creating new billing plans (59%)
• No support for debit card payments (69%)
Perhaps this is why so few of the carriers surveyed are confident that these systems will continue to support them when new demands inevitably arise in the future, according to Guidewire, and is a compelling reason for them to begin investigating alternatives.
Source: Guidewire Software Inc. and INN archivesExclusive content available only on InsuranceNetworking.com
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