Gone are the days when consumers paid their insurance premiums directly to their agents and insurers viewed payments as just an administrative chore. With today's electronic technology and improved customer-service models, payments truly matter. So why do nearly eight-in-10 insurers favor some or significant improvements in their payment capabilities?
A 2009 Celent survey of 316 insurers, which uncovered that percentage, provides answers. While payment channels have proliferated and global business expands the entry points for payments, almost 60 percent of payments are still processed by mail. Only 32 percent are automated.
This boosts expenses and hurts customer service. In addition, the mix of insurers' traditional payment-processing systems is ill-equipped for today's new payment channels and customers' changing expectations. Just look at how mobile payments are growing in popularity. Is your insurance company so up to date that it accepts premium payments by mobile phone?
It's time insurers consider their payments capabilities as a differentiator. If they did, it could maximize working capital, pare costs, bolster the bottom line and improve customer service. And enhanced customer service ranks as the highest goal among 60 percent of Celent respondents.
What insurers require is a single technology platform that can handle any payment type, including cash, check, ACH and card, and from any location - from mail to mobile device. They need a unified platform - or integrated receivables hub - that automates payments processing, routing, validation, clearing and reporting.
This dramatically accelerates processing and significantly reduces both operations waste and unit costs. Unit costs are important, especially for large insurers that process high volumes of payments. And these integrated receivables platforms are available and make a difference.
If insurers aren't convinced of the need for a fresh approach to payments processing, they should ponder these questions posed by Celent:
* Do we get the most out of our costs compared to those generated by close peers?
* What is the cost to our organization of maintaining separate systems?
* Do current tools allow us to manage exceptions seamlessly and workflow efficiently, and generate process intelligence?
* Do our solutions offer sufficient flexibility to meet current and future needs of customers and channels?
Chances are insurers with traditional payments-processing systems will be disappointed by their answers. More discouraging, in today's increasingly competitive market, they may be falling behind rivals that are giving customers and agents more payment options.
About the Author: A 15-year financial-services veteran, Mike Tallitsch is vice president of corporate solutions for WAUSAU Financial Systems, a provider of payment and receivables processing solutions to help businesses move money faster. He can be reached at [email protected]