The Need to Modernize Insurance Billing

Alex Presley: Hello! Welcome to the Sapiens Insurance 360 podcast. I’m your host, Alex Presley, Life & Annuities Business Development Specialist at Sapiens, and I’m so glad that you’re out there listening. This is where we discuss the latest news, trends, and issues from across the insurance solutions and technology spectrum. And our latest episode starts now!

There’s the famous saying, often attributed to Benjamin Franklin, that nothing in life is certain except for death and taxes. With apologies to Ben, I’d like to add to that insurance bills for most households, for the purposes of today’s podcast. And let’s face it, most people aren’t exactly excited when receiving their insurance premium bills and become much less so when they’re faced with a lack of modern payment options. Most insurance carriers today are under growing pressure to modernize billing and payment experiences for their policyholders. And in today’s podcast, “The Need to Modernize Insurance Billing,” we’ll explore the key challenges, emerging trends, and digital tools reshaping how insurers engage their customers from self-service options to flexible fee models. And with me today to discuss the topic is Rob Eberly, Vice President of Sales at Paymentus, a Sapiens partner and leading provider of cloud-based bill payment technology and solutions.

Rob has 15 years of experience in electronic billing and payments, cultivating deep partnerships with market leaders, including many top utilities, insurers, and communication service providers. Throughout his time at Paymentus, he has remained focused on payment modernization strategies while maximizing the consumer experience to drive electronic payment adoption. Rob, welcome to the program!

Rob Eberly: Thanks, Alex. Happy to be here! And thank you for the warm introduction!

Alex Presley: Absolutely, Rob. Now let’s jump in. So, set the stage for us. What have been the barriers for insurance carriers historically in terms of meeting policyholders’ demand for more modern and flexible payment options?

Rob Eberly: You know, Alex, it’s a good question. I think there’s a few factors at play here. So if you think of some of the historical payment providers that insurance carriers might work with, you’re looking at legacy payment providers, maybe with outdated technology, maybe tech that maybe didn’t have the nimble capabilities to leverage innovation and deploy more modern capabilities. So part one I think has to do with the payment relationships that they’ve had historically. But even before that, you know, I think it comes into managing their own homegrown, back-end systems, right? I feel there’s many carriers out there that either have homegrown systems or numerous different divisions and product lines that have different back-end systems that maybe they acquired or inherited through an acquisition. So there’s a lot of, a lot of fluidity in that relationship in terms of what they’re using in the back end and outdated technology. So, you know, kind of back to you, Alex. I suspect that’s something that you see at Sapiens and quite often in terms of helping insurance carriers upgrade their core systems.

Alex Presley: Yeah, that’s exactly right. It’s something that we see time and time again. You have carriers running on legacy systems. Makes it difficult to plug in new payment channels or fee models. And when Sapiens steps in to replace or modernize those cores with, you know, modular, API-driven systems, insurers suddenly have this flexibility to integrate these best-in-class payment solutions.

Rob Eberly: Yep, I think that’s what we do, right? And sorry to cut you off. I was just going to suggest that it’s kind of a, a two-pronged approach, right? Step one ensures that [they] get an appropriate upgraded back-end system. And then step two, that can start to leverage some of that new technology. So it goes hand-in-hand.

Alex Presley: Yeah, absolutely. That foundational upgrade is what unlocks those self-service portals, those flexible installment plans, and the real-time billing insights, which is what today’s policyholders expect. So moving on, how are insurance carriers evaluating their capabilities against peers related to billing and payment, and how do they ultimately interact with their customers?

Rob Eberly: You know, Alex, I think [number] one, they are focused on peer comparisons. They’re looking from a geographical proximity perspective. They’re comparing themselves against peers of similar product lines, maybe in similar size from a net written premium perspective. But I think they’re also comparing themselves against, against the Amazons of the world, against telecom providers, against other verticals that are leveraging best-in-class technology. You know, I think they’re certainly looking to confirm what their peers are doing in the insurance world and making sure that they’re not losing out on customers based upon maybe having a lack of capabilities. But I think there’s also a realization that there’s an opportunity to deploy more nimble capabilities and expand how they interact with their customers. And really, I think we’re seeing a lot of momentum from insurance carriers doing just that right now. And leveraging the template or technology.

Alex Presley: Yeah, it’s a great point. While carriers often start measuring themselves against regional peers offering similar products, I think the real benchmark today is in any seamless payment experience consumers enjoy from Amazon or their mobile carriers. Once insurers see those on-demand flexible billing journeys, they know their legacy systems are holding them back. Modern API-based cores empower them to quickly deploy the same smooth, self-service payment options that keep customers happy and loyal. So okay, so to my next question, to pivot slightly, what are the most common trends insurance carriers are evaluating, as it relates to billing and payment in terms of channels where they interact with customers and different fee models they may be evaluating?

Rob Eberly: So this is a great question and something that quite frankly, could be an entire podcast topic in and of itself. First, there’s a heavy focus on web interactions and trying to drive self-service with single customers. What can insurance carriers do to eliminate calls to their CSRs, to help drive self-service? So those unneeded billing- and payment-related questions don’t result in a call to their contact center. They’re looking to drive paper suppression, reduce reliance on paper, shift to digital. And just making sure that ultimately, they create these avenues based upon where these customers want to interact with. It’s over the web.  It’s auto pay, one-time payment capabilities, text, chat, you name it. The importance is just really having a broad approach of where they can interact with their customers to help drive self-service. So that’s point one. Point two, and this is really a massive focus amongst insurance carriers, is the topic of introducing user fees or surcharging, essentially charging a fee to the consumer if they pay with a credit card, where a user can still make a payment for at no cost, using debit and debit or ACH. But introducing that fee on a credit card payment is a massive cost-savings opportunity to reduce their card-processing expense. Customers are familiar with user fees today, and Alex, I suspect you probably see this in your everyday life, right? Where user fees are tied to everyday transactions.

Alex Presley: Yeah, absolutely. I see those user fees everywhere. You know, in the service charges on concert and event tickets, the small credit card surcharges at restaurants and, you know, even the extra fees plumbers or electricians tack on for card payments. Consumers have come to expect them, I think, to a certain degree, which, you know, makes it a natural fit for insurers that are looking to offset some of those costs.

Rob Eberly: And I think that’s exactly it, right? User fees are everywhere, you can’t avoid them. Customers are familiar if they’re paying their utility or telecom bill, there’s already likely a user fee attached to that. Insurance is no different, and insurance carriers are just now starting to be able to leverage that user fee as one of the largest cost-savings opportunities that they have. And to realize that they can do this, they can do it in a compliant manner, they can do so without disrupting or negating the customer experience. You know, you combine this opportunity to modernize their billing and payment strategy, their approach to billing and payment, while driving material cost savings. That’s become a very powerful equation in terms of how our customers are evaluating project prioritization. It’s really bumping up this billing and payment strategy evaluation to the top of the list, when you can also drive significant savings.

Alex Presley: Yeah, absolutely. It’s a great opportunity to just increase the value that these modernization projects provide to insurance carriers. Okay, so to look at it from a more modern technology perspective, what can insurance carriers gain after implementing more self-service options like chatbots and text payment? What other channels might they be considering?

Rob Eberly: So I think there’s a common theme process, right? You know, much of this is meeting customers where they would pay. Different individuals have different preferences in terms of where they want to pay, how they want to pay, with which instrument. And the more that they can meet the customer where they want to pay, you drive positive customer sat, you increase collections, you reduce late payments, there’s a positive effect across the board. So you mentioned a few of the channels, being able to pay for a PCI-compliant, AI-based chatbot is one, engaging with text pay. You might have customers that want to make a payment through their PayPal app. PayPal has a bill-pay component and have that transaction posted to the insurance carrier in real time. But separately. you know, we hear from many insurance firms that we know, the fact that there’s a subset of customers that have not only an interest, but a need to pay in cash. And some insurance carriers get cash in the mail, still. They’ll get cash at an agent location and it becomes a nuisance. So the idea that an insurance carrier can have a customer walk into any Walmart, CVS retail location, approximately 90,000 locations in total, make a payment in cash posted to them in real time through an existing integration with Paymentus, is a powerful thing. So again, our interest is expanding where they can interact with customers. At what location? Through what payment method, maybe using a digital wallet, or maybe through tech, maybe it’s through chatbot. But the more that they can expand how the customer will interact with them, the more they can increase collection, reduce late payments, increase positive customer experience. It really has, [a] positive impact across the board.

Alex Presley: Yeah. It’s impressive how expanding, you know, beyond web and mobile into chatbots, text payments, the cash in network locations and even PayPal. It creates a truly omnichannel experience in order to meet every customer, you know, where they’re at on their preferred, turf. So by offering all these touchpoints, carriers are not only driving digital engagement, but they’re also, you know, boosting collection and minimizing a lot of those late payments.

So, Rob, based on your work, which of these emerging channels has delivered the biggest surprise in terms of uptake or ROI for insurers?

Rob Eberly: I think the largest trend that we see right now is within digital wallets, and the fact that customers are interested in paying with them from security, from a convenience, from a familiarity perspective. So I think that’s one. But I think the biggest, the biggest power behind all of this is not having to be tied to one of these channels, right? One of these channels or methods in the fact that you can deploy all of them and it can be done without it being a time-intensive project for our insurance carriers. Digital wallets are a massive opportunity, but I think the strength is in having numerous different channels available for customers to pay.

Alex Presley: Absolutely. Okay, Rob, one final important question. To ensure peak performance of all functions, what are the top considerations insurers must not overlook when evaluating their billing and payment strategies?

Rob Eberly: So we spent a lot of time talking about modernization. And I think feature functionality and innovation are huge factors when evaluating payment strategy, maximizing customer engagement, increasing revenue collection, driving a positive customer experience. That’s one factor to the equation, but it’s not the only factor. I think when you look at deploying change and making sure that you can get to market quickly with change and deploy change via configuration, and also having continuous innovation, right? Because it’s one thing to modernize for your needs of today. But insurance carriers are looking to modernize for next month, six months, next year, five, 10 years down the road. So partnering with a, partnering with a provider that can help you on that journey throughout, you know, as payments are continuing to evolve is crucial. And lastly, it’s also the stability of the platform. So you can have a modern, modern payment strategy, payment environment, deploying change quickly, but you need to ensure that you have a stable platform. When a customer needs to make a payment, the payment experience needs to be there, it needs to be reliable from a customer-facing perspective and also in terms of, your internal operations. So there’s not really one single factor that I would suggest moves a needle, but an insurance carrier needs to have a strategy. And all of these kind of work in concert to drive that cohesive strategy. So billing and payment modernization is a major opportunity for insurance carriers. But they need to look at the entire picture when they’re evaluating that strategy.

Alex Presley: I think you’ve hit the nail on the head, Rob. Insurers need to juggle, you know, all of those pillars together, and when they strike the right balance between functionality, speed to market, and reliability, they set themselves up, you know, for stronger collections, happier policyholders, and a more efficient, back-office process. So, Rob, you’ve given me and our listeners a lot to think about the next time we have to go pay a premium, and certainly made the process sound much less onerous, especially when coupled with a modern and streamlined payment solution. I’m sure Ben Franklin, quite the inventor himself, would be impressed.

To our listeners, thank you for joining us. We have so much more exciting content planned, and as always, we’d love to hear from you. Connect with us on social media, share your feedback, and don’t forget to subscribe to the podcast so you never miss an exciting and insightful episode. Until next time, this is Sapiens Insurance 360. Thanks for listening!