How Modernized Billing Systems Lead to Empowered Customers

Older, more rigid systems do not easily handle the required flexibility of bill plan changes and maintenance, nor do they lend themselves to natively working with self-service/handheld applications.

As insurers upgrade their financial and billing systems to meet regulatory mandates for more transparent reporting, they are seizing the opportunity to enhance the customer and distributor experience as well. Carriers that get billing right will reap the rewards of improved customer satisfaction and retention, easier regulatory compliance, and lower operating and maintenance costs. But many insurers are hampered by inflexible legacy systems. What are the capabilities of the new generation of financial and billing systems, and how can they help insurers improve their competitive positions? Is it imperative that carriers undertake a rip-and-replace approach to upgrade their capabilities, or are there other options? And what are the risks of these initiatives? --Peggy Bresnick Kendler

The insurance industry is riddled with aging billing systems designed decades ago that do not have the ability to consolidate all lines of business onto a single platform. These systems are also limited to supporting only a few bill plan/payment plan options and cannot be shared outside the company with consumers. In tough economic times, insurers need to be flexible to meet customer needs or they will lose business. If a customer can't pay an invoice, it leads to late premium payments, policy lapses and eventually the loss of a customer. It is a problem for both personal and commercial lines.

Modern systems allow for changing bill plans to better meet a customer's ability to pay by increasing the payment frequency and thereby lowering the amount of each bill. Extending customers the ability to view their bill accounts, make minor changes and pay online gives consumers more power, and that increases their overall satisfaction with the carrier.

Older, more rigid systems do not easily handle the required flexibility of bill plan changes and maintenance, nor do they lend themselves to natively working with self-service/handheld applications. Carriers can reap the rewards of modern billing systems with a platform upgrade: system consolidation, flexible bill plan/payment plans, account billing, and the ability to have consumer self-service through the web or handheld apps.

Frank Heaps is director, product marketing and sales engineering, for Oakland, Calif.-based StoneRiver.