The challenges of inflation have significantly impacted our nation, and the insurance industry is no exception. Despite hopeful projections that inflation will be regulated by the end of 2024, the current situation is becoming increasingly expensive for businesses, particularly insurance organizations. Inflation, coupled with supply chain issues, has resulted in a substantial rise in costs, especially in the form of claims spending. Estimates suggest that underlying inflation contributed around 45 to 50% of the total increase in claims spending by the end of 2021, and this trend has persisted through 2022 and into 2023.
However, it’s not just costs that have been affected; workloads within the insurance industry have also been swelling, leading to higher rates of burnout among employees. This combination of factors poses a significant risk to both the insurance workforce and the financial bottom line of organizations. In order to navigate these challenges, insurers need to effectively combat the rising workloads and costs they are facing—and that’s where automating premium payments can help.
Time Saved is Money Saved: Evaluating Where to Automate
In today’s business landscape, time saved translates directly into money saved. Therefore, insurance companies must carefully evaluate time-consuming areas where automation can be most effectively implemented. One crucial aspect that demands attention is the billing and payment experience, as it represents one of the few touchpoints insurers have with their customers.
With policyholders now able to switch insurers effortlessly, any inconveniences along the customer journey or mishaps with finances won’t be tolerated. Today’s consumers expect the same, effortless experience they have making a one-click purchase on Amazon or managing their checking account via their bank’s app. Difficulties in the billing and payment process or delays in payment processing will lead to frustration among policyholders and jeopardize policy retention.
Unfortunately, managing billing and payments requires constant attention and entails significant manual work on a daily basis. Without a digital solution in place, staff members are burdened with tasks such as sending bills, processing payments, sending reminders, issuing late notices, and reconciling financial records. Given these challenges, automating the billing and payment process is a prime solution for insurance companies looking to reduce workloads and conserve resources.
The Benefits of Automating Premium Payments
First and foremost, digitizing the billing and payment process can alleviate the strain on the workforce, which is already stretched thin due to the talent shortage in the industry. By automating tedious manual tasks associated with billing and payments, staff members can avoid burnout and redirect their focus toward higher-value projects and priorities. For instance, agents can have more time to concentrate on selling new policies and nurturing relationships with existing policyholders, leading to improved customer satisfaction and retention.
Embracing digital payment options also aligns with the preferences of the modern policyholder. According to InvoiceCloud’s State of Online Payments report, a significant 83% of bill payers, including those paying for health, auto, business, and property insurance, prefer to make payments through digital channels. By offering a range of convenient, flexible, and user-friendly payment options, insurers can exceed policyholders’ expectations, provide an exceptional customer experience, and maintain high levels of retention. Moreover, with automation in place, customers can receive more focused and helpful attention from agents and customer service representatives, and the occurrence of clerical errors decreases, minimizing frustration levels.
Another crucial advantage of digital billing and payment solutions is cost reduction. The adoption of paperless billing, where customers receive their bills digitally, has gained popularity due to its convenience and various benefits. By digitizing bill delivery, businesses can save costs associated with printing and mailing, as well as minimize time spent on manual tasks like envelope stuffing. Additionally, this shift towards digital processes contributes to reducing an organization’s environmental impact.
By leveraging these cost-effective measures, insurance companies can improve efficiency and optimize their financial performance. To estimate potential savings, you can utilize the Digital Payments Estimated Savings Calculator, which helps determine the cost benefits of having more customers pay their bills online.