Seemingly no matter how far the insurance industry moves into the digital age, it still heavily relies on printed forms to communicate. Insurance Networking News asked Francis McMahon, VP of Marketing for Trumbull, Conn.-based Oc
é North America Production Printing Systems, about how insurers can leverage new printing innovations to cut costs.
INN: As the Web becomes an increasingly popular delivery channel, are insurers missing opportunities to extract costs from their print operations?
FM: The insurance industry is such a document-intensive business. You don't buy a box of insurance or configure an insurance system-paper is the physical manifestation of something policyholders place a high value on. So, printed communications have historically been an important component of engaging customers and agents and solidifying customer relationships.
While all types of insurance firms are insisting that agents move away from paper and are offering incentives for customers to go paperless, overall print suppression rates across insurance businesses still hover in the 5% to 7% range. This means that paper is the main channel for more than 90% of customer communications.
Insurers should be looking for opportunities to extract costs from this channel. But they should also be using it to deliver the maximum value as well. These documents don't just provide evidence of a transaction. Furnishing customers with new insurance cards, EOBs or policies offers a valuable opportunity to reinforce the company's commitment to the customer, promote the brand and cross-sell.
INN: How can developments in printing technology help insurers cut costs?
FM: As insurers wrestle with issues such as consolidation, competition and compliance, they need to produce documents in the most efficient, cost-effective way possible. Digital technology, it turns out, is a great enabler of both cost efficiency and marketing effectiveness.
From a hardware standpoint, the latest innovation is inkjet technology, which enables a sophisticated white-paper-in, finished-product-out process. Instead of producing preprinted paper stock or forms and adding variable data and printing checks on dedicated magnetic ink character recognition (MICR) printers, insurers can produce full-color documents and checks with security features on a single platform using plain white paper.
Until recently, this type of solution could only be delivered on toner-based printers. Now, with the availability of high-speed inkjet products and the falling cost of ink, there are operational advantages for companies that have the volume to drive economies of scale. In essence, inkjet machines typically cost more to acquire, but are less expensive to operate so the companies that save the most money are the ones who print the most volume on each device.
If the company is running its own print operation, it has the opportunity to consolidate its printing infrastructure and run more types of work on the same equipment. This way you don't have to put checks in a separate envelope or use costly MICR ink to print the entire confirmation and check on a dedicated MICR printer. Consider that MICR costs 15 to 20 times more than normal ink or toner. Now you don't have to put checks in a separate envelope or use costly MICR ink to print the entire confirmation and check on a dedicated MICR printer. Consider that MICR costs 15 to 20 times more than normal ink or toner.
Also, by enabling more effective householding-a mail optimization strategy that combines multiple mail pieces into one envelope to the same recipient-companies can substantially reduce postage costs, which represent more than 70% of overall communications costs.
INN: Are the benefits of new production printing technologies purely operational or are there marketing advantages?
FM: While the cost-saving benefits and potential for faster time to mail is certainly there, this technology is also a huge win for the marketing department. That digital color press or high-speed inkjet printer you're using to facilitate householding can support a variety of paper types with sophisticated finishing capabilities that enable the marketing department to do things they didn't think were possible-at a lower price point, with more control.
All of this power and flexibility enables you to vastly enrich the value of your customer communications by adding targeted, personalized messages that educate, inform and even sell. By adding data-driven marketing messages to documents your customers are already reading, you can increase customer relationship lifetime value.
Additionally, postal rates have been climbing since 2008. However, the cost of the second ounce has gone down-so putting more in one envelope makes sense. Enriching transactional documents with marketing messages instead of sending out a separate direct mail piece makes excellent business sense-and it's made possible by the latest digital print technologies.
