In a day and age where competition is as stiff as it has ever been, most of our participants agree that billing and payments deserve closer scrutiny, greater attention, and higher priority so that it reaches its full potential as an efficient, effective brand builder.<\/p>\n\n\n\n
Stepping Up to the new era of customer billing and payment expectations<\/h2>\n\n\n\n
We see it across all industries and businesses \u2013 customers are paying attention to how they are billed and paid. Their expectations, whether met or unmet, are one determining factor in whether they choose to switch to or stay with an insurer. These expectations are being driven by an ever-growing set of options that encompass everything from customizable billing schedules to digital payment methods like ApplePay, Venmo, company apps, and others to make or accept payments. At the same time, customers are expecting a seamless digital experience. <\/p>\n\n\n\n
Majesco\u2019s customer research, reflected in Figure 1, highlights the growing demand for these alternative payment methods, particularly for Gen Z and Millennials. <\/p>\n\n\n\n
Figure 1: New Customer Digital Commerce Expectations<\/em><\/p>\n\n\n\n While insurers must adapt their strategies to be digital-centric, some customers still prefer writing a check. As one roundtable participant said, 70% of P&C payments in their line of business are made via check \u2013 an astounding number considering how many people have adapted to digital options. To retain trust and loyalty, and keep revenue unobstructed, insurers must meet all billing and payment options.<\/p>\n\n\n\n These rising expectations accelerate the shift of billing and payments from its traditional role as one of the most \u201cback office\u201d processes to the \u201cfront office\u201d as a crucial capability in delivering a great customer experience. Insurers increasingly realize the significant role that billing plays. They are waking up to the fact that exceptional service is important beyond the financial operation. First-rate service is crucial to building and enhancing relationships with customers, partners, and distributors. In today\u2019s increasingly digital world, legacy billing systems do not meet these growing needs and expectations.<\/p>\n\n\n\n Advanced billing and payment capabilities can no longer be viewed simply from a transactional perspective, but now must fill a crucial role in creating an inviting and holistic digital experience. Every touch point is an opportunity to humanize and personalize the brand relationship and strengthen brand trust and loyalty.<\/p>\n\n\n\n In rethinking billing and payments, insurers are focused on key business priorities including:<\/p>\n\n\n\n Timely, frequent, and personalized digital communication is equally as important.<\/p>\n\n\n\n Digital channels like voice, smart speakers, email, or text\/SMS are increasingly used to enhance the relationship and experience. Communications are no longer limited to billing statements or payment statuses. Frequent communication regarding other products or value-added services is acceptable. How are insurers becoming helpful, not just transactional? Suggestions regarding alternative billing options that might better align with a customer’s life may provide greater customer personalization and engagement. It is increasingly important to avoid policy lapses or late renewals. <\/p>\n\n\n\n \u201cPayments, from a billing perspective, is the most frequent touchpoint that you have at any given point with your insurers. This is the opportunity to have that great customer experience, where they say this was easy, this was frictionless.\u201d<\/em><\/p>Roundtable Participant<\/cite><\/blockquote><\/figure>\n\n\n\n Insurers must strategically and tactically begin to bring billing and payments into customer experience and digital engagement plans. A diverse set of digital payment options, advanced technologies, and a coordinated mix of digital communication methods will lay a solid foundation and meet the growing expectations of customers, agents, and partners. <\/p>\n\n\n\n \u201cWe\u2019ve created an organizational change management team underneath our chief experience officer. They are building out an entire portfolio of messaging. We want to understand the obstacles that people see. If we can get that information and speak back in terms they are using, we can influence them to the environment we want.\u201d<\/em> <\/p>Roundtable Participant<\/cite><\/blockquote><\/figure>\n\n\n\n Digital billing and payments can re-energize an insurer\u2019s ability to meet retail trends head-on.<\/p>\n\n\n\n To get to the next level and rethink billing, they needed to overcome hurdles like crippling legacy debt that hinders their effectiveness and customer experience as it relates to billing and payments and rethink their future state. What opportunities would arise if insurers could become highly digital, with a new operating model and a solid, yet flexible technology foundation? <\/p>\n\n\n\n One of the critical hurdles for digital transformation is legacy debt \u2013 both the operating model and technology \u2013 stifling an insurer\u2019s ability to meet customer digital expectations, expand billing and payment options and drive down operational costs. An insurer’s legacy debt removes the ability to launch new, innovative products such as embedded, on-demand, UBI, and value-added services due to the limitations of the technology. Insurance Billing and Payments software<\/a> like Majesco Billing for P&C<\/a>, Majesco Billing for L&AH<\/a>, Majesco Digital Electronic Bill360 for P&C<\/a> and our ecosystem of partners<\/a> enables, not inhibits.<\/p>\n\n\n\n Each of the areas reflected in Figure 2, highlights the market trend challenges and operational realities of legacy debt.<\/p>\n\n\n\n Figure 2: Current state of payments in the insurance sector<\/em><\/p>\n\n\n\n Addressing the current state requires a strategy and plan that tackles the operational model, including all processes, technology, and culture. Today\u2019s customers expect their preferred brands to instinctively update their processes and transaction capabilities to keep up with what their devices and lifestyles have made possible.<\/p>\n\n\n\n They want a risk product, value-added services, and an experience that provides them with what they need to manage their lives. Insurers must humanize the process and experience. But traditional product-oriented strategies handicap insurers. Insurers need to \u201cthink outside their own boxes\u201d and keep customer lifecycles and needs in focus. <\/p>\n\n\n\n Insurers that pay attention to these shifts should take the next step and make quick moves to remove their crippling legacy debt.<\/p>\n\n\n\n The future state demands an operational model and technology that provides a foundation to adapt, innovate and deliver at speed to execute strategy and market shifts. The rising importance and adoption of platform technologies, APIs, microservices, digital capabilities, new\/non-traditional data sources, and advanced analytics capabilities are now crucial to market leadership.<\/p>\n\n\n\n From the front office to the back office, SaaS next-generation platforms are reshaping the business focus from policy to customer, from process to experience, from static to dynamic pricing, from point-in-time underwriting to continuous underwriting, from the historical view of data to predictive and prescriptive data, from traditional products to new, innovative products, and so much more. Insurers\u2019 ability to deliver increased value to the customer relationship will deepen and differentiate customer loyalty.<\/p>\n\n\n\n Central to the increased value is improving customer choices, yet with choice comes complexity. This complexity can be simplified, managed, and optimized with a next-gen billing and payment unified strategy. <\/p>\n\n\n\n A unified billing and payment strategy provides a holistic, enterprise approach to business capabilities, processes, and customer engagement. It moves billing and payments from the back office and a defensive position to the front office and an offensive position for customer engagement, leading to higher satisfaction, loyalty, and retention.<\/p>\n\n\n\n Direct and Agency bill are two of the most used billing types. Direct bill is when an insurer sends the bill to the policyholder for payment directly to the insurer. In contrast, agency bill the agency bills the insured and collects the premium then pays the insurer. Specific processing is required to support both of these. There are other types of billing including list or group bill, third party bill (such as mortgagees), and split or multipayer billing.<\/p>\n\n\n\n While these continue to be dominantly used, as products change and how premium is calculated \u2013 more frequently or in real-time \u2013 innovative billing options are emerging. Insurers must be able to support these new options to meet product demands of customers.<\/p>\n\n\n\n One tactic of an offensive strategy that is being considered by some companies is including the ability to have computable contracts (putting the policy agreement into code) for each policy. For example, a rock hits your windshield. You take a picture and submit a claim. Because the data about your car and policy are known through this computable contract, the payment can flow immediately and digitally. The process is fast, and it naturally reduces operational costs.<\/p>\n\n\n\n Innovation focused on the customer can drive additional offensive plays while accelerating transformation. Creating a holistic customer experience not only provides digital billing and payment options, but also enables broader communication and engagement including cross-sell or up-sell of policies with additional products, amendments, or value-added services based on their unique demographics.<\/p>\n\n\n\n Inflation is causing customers to evaluate all their expenses. As a result, some are considering alternative financing options such as Buy Now, Pay Later (BNPL). BNPL is a relatively low-cost, flexible <\/strong>credit option that provides faster access to credit<\/strong> compared to other unsecured loan products, thereby reducing uncertainty and easing purchase decisions for customers. <\/p>\n\n\n\n This option is primarily driven by Fintechs who are offering access to credit for customers with low credit scores. It gives them the products they need with a lower up-front responsibility. They receive:<\/p>\n\n\n\n It is estimated that 40% of customers expect installment loans as a payment option, but in major downturns, Deloitte estimates that installment loans can act as an important bridge for over 90% of customers. <\/em><\/p>\n\n\n\n This payment option could be a consideration in helping people pay large premiums. For some insurers, this kind of tactic may not seem crucial. However, if you consider that part of brand building is making transactions easy and painless, it fits squarely within the insurance brand strategy.<\/p>\n\n\n\n In our next blog, we’ll look at how insurers can arrive at the future state. How can insurers choose and use the right combination of billing and payment technologies that will fit customer-focused strategies and build the brand through the best possible experiences? Deloitte and Majesco together are working forward thinking, leading insurers in the industry, to rethink their billing and payments operation and technology to elevate their brand and customer loyalty in a world of rapidly changing expectations.<\/p>\n\n\n\n For a deeper look, be sure to download the Majesco\/Deloitte report, Rethinking Billing and Payments in the Digital Age<\/a>.<\/p>\n\n\n\n Today\u2019s blog is co-authored by Denise Garth, Chief Strategy Officer at Majesco, and Ajay Radhakrishnan, Principal, Deloitte Consulting<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Mobile phones are a part of us now. Most of our lives are spent within inches of a mobile device. We need them almost like we need food and water. They allow us to run most of the logistics of our life wherever we may be. They allow us to constantly communicate \u2014 merging life…<\/p>\n![\"\"](\"https:\/\/staging.majesco.com\/wp-content\/uploads\/2023\/06\/Fig_1-2023-06-15-1024x471.png\")
<\/figure>\n\n\n\nCultivating customer experiences that support the brand.<\/h2>\n\n\n\n
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Communication is critical.<\/h2>\n\n\n\n
Digital billing and payments: where do insurers begin?<\/h2>\n\n\n\n
Deal with the hurdle of legacy debt.<\/h2>\n\n\n\n
![\"\"](\"https:\/\/staging.majesco.com\/wp-content\/uploads\/2023\/06\/Fig_2-2023-06-15.png\")
<\/figure>\n\n\n\nUnify the technology strategy and customer-focused tactics.<\/h2>\n\n\n\n
Traditional example: Direct and Agency Bill<\/em><\/h3>\n\n\n\n
Innovative example: Computable contracts<\/em><\/h3>\n\n\n\n
Innovative example: Buy now, pay later. <\/em><\/h3>\n\n\n\n
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