What happens that makes an insurance customer want to shop around? One important reason is that the customer’s billing needs couldn’t be met. A future-focused strategy is required because billing is that important to the business, and a customer-first strategy with billing innovation and transformation built around it will pay for itself. Digital services are expanding within the insurance organization, and there’s an excellent practical case for a quick, sustainable, and valuable ROI.
Previously thought of as back-office financial functions, now billing and payments are a key component in any growth and innovation strategy and are at the center of the digital customer relationship due to being the most frequent customer touchpoint for an insurance company. The future success of an insurer can be anchored by a redesigned billing experience.
Over 60 percent of customer interactions are digital – everything from messenger apps, buy buttons, mobile payments, and contactless payments via online commerce websites1. Unfortunately, the majority of billing systems are not ready to meet elevated challenges of customer success and service expectations. A universal touchpoint for insurers is billing. Claims are infrequent. Billing and payments are persistent. Now is the time to reassess the foundation of billing and payments before the gap between billing’s technology and service becomes overwhelming.
Billing and payments are a key component in any growth and innovation strategy and are at the center of the digital customer relationship.
Making forward-thinking plays to outperform the competition is the proactive strategy. These innovations in billing models will energize the business because they will allow the entire organization to think in larger scale without billing and payment constraints. But billing needs to simultaneously respond to market necessities, react to the status quo, and not give up the foothold already gained. This would be comparable to keeping service levels, tracking information for reports, and maintaining strong omnichannel service throughout stressful moments, like high call center volumes.
Adapting to new business demands and striving to leap ahead of the competition while maintaining operational effectiveness is the goal.
Optimized Operations and Customer Engagement
Insurance billing and payments cannot be ignored because they sit at the convergence of customer engagement and cash flow.
Billing and payment solutions' foundational elements are task-oriented:
- Calculate customers' payments that are due
- Set up payment plans
- Produce invoices
- Collect payments
- Create reports for management
These are crucial in generating successful billing processes that produce service quality, encourage customer and distributor relationships, and support financial operations.
However, these operations will not slingshot the insurer over the competition in the marketplace; they will only keep them in contention. Meeting the digital requirements of today’s customers requires more than optimized operations and customer engagement.
Customer Experience and Innovation
Billing plays a substantial role in the comprehensive customer experience. It’s much more than a financial arrangement. Billing comprises major events, like cancellation avoidance and renewals. These are opportunities for insurers to follow through on the brand promise of service and protection; they are trust-building.
A notion distant from electronic payments of yore, e-commerce, is also encompassed by experience. The transaction’s payment part is now a piece of a digital value chain that’s become integrated, including recommendations, bundling, search features, complex schedules, and quotes. It entails data in and out to be free streaming with multiple integrations.
Insurers are offering new payment methods and transaction types that are like nothing traditional billing platforms have ever handled due to innovation in insurance products and services.
Embedded insurance makes a great example. Can an insurer’s billing and payments offering communicate easily with the transactional channel of a partner? What are the necessary steps an insurer needs to take to prepare themselves for innovations that are the trickle-down from a new product or service?
One way an insurer can be proactive is to forego a back-office transactional process legacy replacement and instead employ a future-focused enterprise billing solution that focuses on a front-office approach.
New markets can be captured while continuing to grow existing markets by the improvement in communication and sustained growth.
Digital capabilities can be transformed by the growing demand for access to billing information in real-time, new payment methods, and billing plans. New markets can be captured while continuing to grow existing markets by the improvement in communication and sustained growth to leapfrog the competition.
A Growth Strategy Enabler
Insurers will be allowed to keep one eye on the company and the other on the customer by a billing operating model shift. Functional (policy, billing, and claims) and product-focused (personal/commercial) were the traditional insurance operating models, resulting in servicing and distribution technologies that reflect the prerogatives and limitations traditional strategies dictate.
Traditional operating models’ evolution has been incremental and focused on centralization to scale benefits and deliver scope. The billing models of today must account for billing and payment capability trends and customer desires while continuing to meet internal demands.
If there is to be hope for maximizing value from their technology and functional transformations, every insurer must experience an analysis that looks inward – what will it take to attain their transformational customer-focused ambitions?
To make a meaningful difference, a deep understanding of the carrier’s various interactions as well as its customer base is what is required for a customer-first approach. Moreover, operating models that profess to be “customer first” are not limited to an insurance carrier’s interactions with its customers, as they are not an evolved version of the status quo. The effect of new experiences will hasten, not solely due to major tech players like Apple and Google but also in response to the smaller tech/insurtech firms seeking a competitive advantage.
Matching a Startup Step for Step
Startups can engage customers from the beginning, free from the need for data conversion or technical debt, giving them a billing advantage. This advantage enables them to develop operating models that are customer-first and are fueled by data/tech proficiencies to supply insights that will mold interactions. One example is startups may start with optimized workflows to initiate retention best practices automatically. Each customer interaction can be prioritized through the scope of retention analysis by a state-of-the-art workflow with “next best action” programming installed.
Startup insurers, with clarity and efficiency, can sort, rate, rank, and predict. Traditional insurers would find it much harder than startups to implement the vital improvement metric of customer effort scoring. While it is just one example, it’s an indicator that the customer experience world is quickly evolving, and insurers must keep up with it.
The conventional contact center is a prime example of how large carriers are limited by their legacy technology debt and operations but are still attempting to incorporate changes in customer behaviors. How capable of bridging customer service channel methods are carriers during an omnichannel revolution? Insurers are grappling with perfecting service while considering shifting customer expectations.
Where the whole thread comes together is communication with customers. Previously, all the aspects of billing and payments were differentiated more clearly from channels of communication and service. However, agents and customers are receiving from insurers quicker and easier access to those segments of the billing and payments systems that will aid in attaining their objectives.
There are many hurdles to getting communications streamlined in an omnichannel era. Billing must stay in constant contact with communication management because it is so customer-service heavy. Technologies that can assist in picking up the slack must offset any points of difficulty with this part of the strategy for omnichannel communication.
A revamped billing model will take into account the effect and future focus that could include the replacement of operating models that are siloed, greater agility, the leveraging of partners in the ecosystem, and reprioritization. These improved endeavors will offer a greater return on investment, the most important being customers who stay, buy and quote because their carrier permits them to conduct the way they want.