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Group Billing: When Premium Payments Are Late

By James Hehir, Product Manager, FINEOS

One area that typifies the modern conundrum of marrying efficiency with good Customer Experience, (CX), is group billing.  As we continue to enhance our billing offering and have more in-depth discussions with our customers, one challenge that comes up time and again is the issue of executing the past-due follow-up business process efficiently. You want maximum automation but also to respond according to the group account’s particular circumstances acting differently for one-time offenders and mobilizing account management for large accounts.

Research we commissioned from Novarica, (https://www.fineos.com/resources/novarica-report-overcoming-the-challenges-of-life-insurance-billing/ ), revealed that insurers recognize the limitations billing systems in place today have on CX and this is a key business driver for replacing their billing systems.  In fact insurers ranked CX as the top driver for billing system replacement, ahead of billing accuracy and reconciliation.

On the face of it, past-due follow-up is just a process any creditor has to follow, but looking deeper, there is an opportunity to raise the CX bar; tailoring the process for accounts meeting certain criteria and, in general, providing better, more informative and personalized communications.  A few group insurers have shown me the workarounds they have developed to deal with this and honestly we believe we can do better.

Why do systems struggle with the process today?

No system-of-engagement capability

Billing systems in place today typically don’t have workflow or engagement capabilities driven by business rules. These are essential to handle the process with appropriate automation and supporting tools.

Poor timing

Legacy platforms are often unable to produce a single premium invoice that bills for the employer-paid cover in advance and the employee-paid cover in arrears, resorting to ‘in advance’ for all lines of coverage. This can be an inconvenience for the employer and often leads to a higher incidence of past-due follow-ups.

Not using all pertinent data

Funds may sit in suspense accounts for days if they have to be manually allocated and you don’t want to send out a delinquency notice during this window.  Similarly, a delay will always occur when the customer pays online via the carrier’s web portal before the funds are actually received.

Where can you improve?

Automation:  Volumes are high, with different responses for each stage in the process so automation is key and a good system of engagement will use account preferences and business rules to help you deliver the appropriate response in any given situation.

Categorize:  Don’t treat an atypical, unrepresentative late payment the same as the regular offender.  Look at the reasons and respond sensitively, for example with a courtesy phone call.

Give detail:  Clearly set out the due and unpaid amount for each coverage and indicate how any partial payments have been allocated.  Information must be clear, complete and aimed at helping the customer.  Supplement paper mail with secure email.  These are faster and can be copied to multiple recipients.

Beware unallocated funds:  If the payment is sitting as unallocated money in a suspense account, that’s not necessarily the customer’s fault.

Cater for extensions:  Where a normally prompt payer requests a once-off extension, the system should readily support this, according to its business rules.

Communicate with all the right people:  For group accounts with multiple billing locations, does Head Office need to be informed?  The system should record this preference and deal with it accordingly.

Deal with contiguous billing periods:  Billing periods should not be considered in isolation. When one event catches up with another it is poor service to communicate about each separately.

Forewarned is forearmed: Let customers know informally via email that they are about to get a delinquent notice.

The sunlit uplands

Insurers recognize the big impact billing has on CX, and how difficult it is to deliver well, especially with multiple billing systems and manual processes.

Helping your customers manage their own processes elevates the insurer from provider to partner.  The additional rewards will fall naturally into place as a result.  These are not insignificant:

  • Simplification brings reduced administrative cost.
  • Automation and system controlled business rules mean fewer errors that need correcting.
  • Shorter and more controlled billing cycles result in better cash flow and reduced average collection periods.
  • Detailed and easy to read business intelligence about your customers and your financial situation means more informed decisions.
  • Confidence in your procedures is a selling feature.

All of this and greater customer satisfaction, better retention, and improved brand value.

These aspirations are held by many insurers, and all of those dedicated to raising the bar in customer service.  They need not remain aspirations.  These capabilities and benefits are available today, all you need is the right billing system.