Billing has always been a headache for insurance businesses. But in light of factors like a widespread digital transformation and a health crisis due to the COVID-19 pandemic, insurers have had to face a number of unique challenges over their money matters.
These include cost pressures, billing for new policies that are more flexible and standalone in nature, and responsive billing processes for a demanding insurance market. In addition, insurers are in intense competition with each other. It’s currently a race to see who can leverage their agility and tech-savviness to win over the most customers and secure the most revenue.
Mastering your insurance organization’s billing cycle is one of the best ways to improve your business performance. By rethinking your billing and revenue management, you’ll be able to reduce administrative costs for handling bills, identify revenue-making opportunities, and cultivate the trust of multiple generations of insurance customers.
To that end, here are five ways to achieve faster and more accurate billing cycles. Practice these today in order to improve your company’s billing and revenue management processes.
Manage Your Billing and Revenue Management from a Dedicated Solution
First, you will want to veer away from doing your billing and revenue management on a monolithic or outdated legacy system. It would be a good idea to invest in a more agile digital insurance platform that can perform these functions with greater efficiency than your current tech stack.
There are several billing and revenue-related advantages to upgrading your insurance solution. For one, you’ll be able to use a dedicated pricing engine to ascribe the right prices for your customers according to their evolving insurance needs.
For another, the solution will allow you to manage a large volume of bills according to the scale of your insurance business.
You’ll also be able to automate the rote tasks in your billing cycle so that they can be addressed quickly, and their resolution won’t be as susceptible to human error.
And lastly, it will be easier to maneuver your billing arrangements for different policies and premiums based on all the different federal rules. Arrangements that insurers usually find difficult to handle—for example, stop loss coverage for Administrative Services Only (ASO) and billing hierarchies for enterprise-level insurance plans—will be a breeze with upgraded insurance software.
Achieve Full Configuration of Your Billing Policies
The second thing you will want to do is to set sure parameters for your billing policies. You can adjust them as necessary, but whatever iteration you uphold has to be followed by your personnel.
Some examples of parameters that you should revisit are the following:
â— Which day of the month to send each customer their bill. It can be the same day of the month that a customer first enrolled (for example, the 25th of each month if your customer signed up for their insurance plan on the 25th of January), or on the same day for all corporate policyholders for a particular insurance category.
â— How often to bill customers if monthly billing is not the default in their arrangement.
â— Minimum amounts that will require billing.
Supplement Your Billing Cycle Management with Improved Revenue Management Processes
Billing and revenue management are closely related processes, because both have to do with ensuring that your company makes a sustainable profit. Thus, it’s only right to supplement any changes you make to your current billing protocols with necessary changes to your revenue management strategy.
Some improvements that you can make as early as today are:
â— Find a way to consolidate your accounts receivable (AR) for your individual customers and your corporate clients.
â— Detect revenue leakages between billing cycles. It would be good to find out the common causes of missed payments, such as failed credit card payments, and ensure that your customers can find other ways to pay on time.
â— Identify opportunities to improve monthly revenues through billing, such as sending auto-reminders to customers when it’s almost time to pay their bill.
Strengthen the Customer Management Aspect of Your Billing and Collection
Yet another helpful thing that you can do for your insurance company is to ensure that up-to-date customer enrollment data is fully incorporated into your billing processes. This will result in efficient and personalized billing experiences for your insurance customers.
Make your billing process align with pricing strategies for particular categories of customers, for example by tier or based on their age. You can also ensure that your billing system quickly accommodates changes to pricing based on life events. The more responsive your billing process is to your customers’ life circumstances, the better they’ll be at paying the correct amount at the right time. Don’t lose sight of how important your customers are in your billing cycle.
Be Conscientious About Your Financial Reporting for Billing and Revenue Management Processes
Lastly, for best results, you will want to monitor any changes you make to your billing and revenue management processes. This is the only way that you will be able to determine how successful your billing process is.
For example, you can keep an online ledger that shows you and your staff what your insurance organization’s financial health looks like based on its billing and collection. From here, you will be able to see if there’s any need for your company to re-tailor its billing and revenue management processes.
Conclusion: Increase Your Insurance Business’s Value Through its Billing and Revenue Management System
These are indeed challenging times for insurers, but they can definitely build their business value by improving their financial housekeeping skills. Knowing that, make billing and revenue management priority areas for your company, and strive to do better for each billing cycle that comes around.