By CYRIL TUOHY, managing editor of Risk & Insurance®
It's that time of the year again, when insurance technology purchasing managers in the market for new billing systems scour the trade-show floor at the annual meeting of the Insurance Accounting & Systems Association, which will be held June 7-9 in Dallas.
Billing systems, which were top of mind last year, will likely be at the top or near the top of the technology agenda this year also. If nothing else, the subject is on the speech docket. Billing will come up in the conference's technology supersession titled "Making the Grade: Insurer Technology Report Card."
Given soft property/casualty prices, there's nothing worse for an insurance carrier than to be leaving money on the table by underperforming billing systems churning out data of questionable quality.
When you consider that the number of risk managers who file a claim in any given year is maybe 7 percent or 8 percent, yet the number of risk managers who get billed by their carriers is 100 percent, it's not hard to see the importance that accurate billing systems play in contributing to the bottom line.
"If you have quality problems upstream, you don't want it to get to the customers," said Steven Adler, director of information governance and chairman of the IBM Information Governance Council. "You can see why organizations don't want to make billing mistakes because it means losing customers."
Some insurance companies are so large that they have more than a dozen billing systems geared along the lines of product silos. Given this kind of segmentation, it's not hard for billing clerks to make mistakes.
In addition, some corporate customers are asking that carriers bill them through different channels and to offer them more payment flexibility to ease the cash flow pressure.
"Insurers have come to understand the importance of billing as a customer service touch point," wrote Kimberly Morton, global product marketing director at billing vendor Guidewire Software, in an article published last fall.
In a recent industry survey, 80 percent of all carriers responding reported that billing is "important" or "very important" to customer satisfaction, noted Morton, and 100 percent of large carriers surveyed believed that billing has an impact on customer retention.
"In insurance, there's a lot of upstream business mistakes with downstream impacts, and it's hard to measure the consequential impact of all the mistakes every day," said Adler. "Most often, we only discover them after even bigger mistakes in decision-making are made. And this just isn't working anymore. We need to discover errors before they reach the customer."
The good news for the industry is that there's no shortage of help. In a 2008 report, the insurance technology consultancy Novarica noted that the marketplace for vendors offering billing systems had expanded over the previous two years, with 12 "major systems vendors" active in the billing marketplace.
June 1, 2010
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