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Customer-Centric Cash Flow

Insurers typically neglect the critical customer touch points of premium and claim payments. A customer-centric approach to these traditionally back-office functions not only pleases customers, it also brings efficiency and transparency to insurers' processes as well.

Much progress has been made in the insurance industry's arduous transition from policy and line-of-business orientation to a more enterprisewide, customer-centric approach to processing. However, insurers have continued to lag behind other industries in one of the most important contact points with customers: the exchange of funds, whether payments from customers to insurers in the form of premium, or from insurers to customers in the form of claim payments.

Carriers typically have done better in making claim payments, particularly in the property and casualty segment, given the conception of claims as the time for an insurer to shine. But even P&C companies struggle with multiple systems issues with regard to payment and a lack of a unified and more real-time method of managing collections and disbursements. When all is said and done, payments to and from an insurance carrier constitute, like claim service, another moment of truth, and one in which carriers' performance often leaves much to be desired. >>

When it comes to payments, in either direction, what customers want are options, according to Kristen Park, COO for personal lines, The Hanover Insurance Group (Worcester, Mass.; $2.6 billion in revenue). "They want options, and they want them in multiple ways -- in how they receive and pay, and how they access related information," Park says. "They want that information to be clear and concise, and they want to know that they have paid or received the appropriate amount."

The front-line options in question include the ability to select from the gamut of existing fund transfer mechanisms that go beyond paper, including electronic check, credit card and debit transactions, and scheduled electronic funds transfer (EFT). But, even with these mechanisms in place, the customer experience can fall flat without the back-office systems capability to craft payment schedules and respond to customer inquiries about the status of billing or claim payments. "Carriers are struggling with getting to a single account balance system across their several lines of business, where they can deliver the customer a single bill and reconcile short-pays and over-pays," asserts John Burke, VP, insurance solutions, SAP America (Newtown Square, Pa.).

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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