Leverage Billing Systems to Increase Customer Satisfaction MajescoMastek facilitates this workshop designed to assist attendees in deepening their understanding.

Leverage Billing Systems to Increase Customer SatisfactionMajescoMastek facilitates this workshop designed to assist attendees in deepening their understanding about the connection between billing systems and keeping their customers happy.

Mike Andrews, SVP

Acquisition and Retention

From a Numerical Perspective:

• The cost of acquiring new customers can be up to 10 times the cost of retaining an existing customer.

• A small increase in retention rates can add millions to premium revenue, while an increase in lapse rates for unprofitable customers can dramatically improve combined ratios.

Small wonder that the ability to acquire and then retain the ‘right’ customer is the recipe for success for every insurance carrier

Are Your $$s Aimed at Acquisition or Retention?

• New product introductions designed for growth

• Expansion to new territories designed for growth

• Investments in new policy administration systems to stimulate growth

• Marketing dollars are typically aimed at acquisition of new customers

Just remember, another carrier’s new policy was moments before your

‘right’ customer. Take your existing customers for granted at your own risk because the barriers to switching keep

coming down e.g. switching rate for personal auto is 39%!

Do Your Customer Touch Points Attract or Repel?

• > 70% of all service center calls are billing related. What is your answer time?• Is the customer responsible for paying multiple bills you send?• Are your channel partners spending time fielding billing questions for you?• How are you presenting your bills and how are customers able to pay?

Invoice 1Policy

Inception / Renewal

Invoice 2 Invoice 3 Invoice nClaim

OR

Poor service in resolving billing issues is worse on customer retention than almost anything except poor performance in claims.

What is Your Situation? What would billing most improve?

Rank the area that would benefit most from a Billing application today

Innovate in addressing market needs

Operational Cost Reduction

Customer Retention

Agent Service

Customer Service

0 0.5 1 1.5 2 2.5 3 3.5 4

*Based on 13 Online Survey Responses

Ranked 1- Highest , 5- Lowest

Input from Field…

“We take pride in our focus on Customer Service and we see the billing system as the most critical component of that. Most of the insureds will have 1 touch point with the Policy Admin System and we hope (with a big grin) that they won’t have any with the Claims System, but each one of them gets more than one bill during the term. Given that most inquiries are tied to billing or

billing related topics and given the sensitivity around $$ (especially in these tough times when low cost is a big

driver), an efficient Billing system that can manage customers based on their profile/behavior is critical for

the success of an Insurance Enterprise“

Operations Director, Large Regional Personal and Commercial Lines Carrier

Better Billing = Better Customer Service

• Create, manage, fulfill and strengthen a brand promise of convenience and trust

• Deliver personalized content, promotions, and experiences (and oh yes! A single bill!)

• Provide web-based self service and much more rapid response to call center interactions (insureds and agents!)

• Handle special situations during a call e.g. changing a pay plan/installment schedule to accommodate a long standing customer in a time of need!

• Others??

Enable customers /agents self service for 80% of their needs. Free up your valuable resources to delight them during that critical 20% of the time

But Wait…What is Your Reality Today?

• Inability to quickly deploy new billing plans • Lack of flexibility re: payment types -

ACH, Credit Card, EBPP, EFT• High difficulty and expense of maintenance • Difficulty of adding additional functionality• Poor reporting capabilities inhibit visibility into business performance • Limited support for targeted invoice messaging to alert customers of new

products and services that may be of interest• Extensive manual entry and little automated validation lead to invoice

inaccuracies and subsequent customer disputes • Carriers of ~$1B in premium average almost 4 billing systems

The Facts: <50% of carriers can support credit card payments. >25% of carriers say no changes to legacy billing systems due to difficulty/risk

What is Your Situation?

Unable to support customer and agent service needs

Inability to support innovation

Disparate systems leading to high maintenance cost

Compliance and reporting requirements unmet

Lack of flexibility to change or enhance billing rules (payment plans, due date calculation etc)

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Rank the biggest challenge in your Billing application today

Ranked 1- Highest , 5- Lowest

*Based on 14 Online Survey Responses

Building the Billing Replacement Business Case

• Improve customer service

• Consolidate Billing Systems for cost advantages

• Support new Line of Business

• Support new structure (direct v. agent bill)

• Support new channel (online)

• Support new payment type (cards, EFT)

• Others???

Rate which of these you would expect in a modern billing application

Vendor track record with complex integration

Existence of a configuration layer

Existence of a business process layer

Workflow that drives industry best practices

Mature reporting capabilities

Seamless Integration with other business applications (Industry standards used)

Calculation of Accounts Receivable

Web based Interface for each user group

Bundled in EBPP module

Support for various billing methods – Direct Bill/Agency Bill/Item Bill

0 0.5 1 1.5 2 2.5

1= Very Important, 2= Important ,3= Nice to Have, 4= Not Important

*Based on 13 Online Survey Responses

Some Additional Detail

• Cash Application– Improved cash flow with faster payments– Automated or simplified cash reconciliation – Decreases lockbox fees (EBPP)– Payment validation and fraud prevention cuts payment issues

• Operational Efficiencies– Significantly reduce billing and payment transaction costs– Lowers print & mail costs– Fewer, but more ‘sticky’ customer service calls– Reduce cancel / reinstates– Lapse business that offers a poor return

• Customer Satisfaction– Provides improved customer choice in payment methods– Open all hours (web-based)– Immediate and reliable application of payment to accounts – Increased customer loyalty/retention– Significant capabilities to offer cross- and up-sell– Gain entry to customer email inboxes with bill notifications

• Other– Go Green – cut paper

Leverage the Power

CFO Considerations:• Improve operational efficiency and reduce costs • Ease-of-use and automated processing• Increase transparency in the process

CIO/CTO Considerations:• Reduce IT operational costs • Enterprise integration• Leverage common data-model

CEO Considerations:• Grow the business with no back-office overhead• Improve customer service experience and channel retention

Selling Change to the Corner Offices

Input from Field…

“Today we have sophisticated and demanding customers, insureds and agents, that are not willing to

adapt to our products or to how we do business. Instead we exist to satisfy their need or problem. I

think a key point to a billing system is that it must offer flexibility to changing customer needs, especially with insurance. We don’t provide anything tangible so the

“easier” we are to do business with or present transactions to the more apt we are to retain and keep

customers happy. Let’s face it most customers don’t understand their policy or endorsement, but an invoice

should be self explanatory from a customer viewpoint.”

Manager Billing Operations, Large Regional Commercial Lines Carrier

Is Your Billing System Supporting Customer Service or Breaking it?

In Conclusion

1

2

3

Billing is a strategic tool for marketing and customer service

Carriers need to break free from the rigidity of existing systems

Insurance Carriers benefit greatly from functionally rich billing system through customer service and operational efficiencies

Thank You