How change succeeds: Technological innovation and digitalisation in insurers' collections and disbursements (2/2)

‘97 per cent of insurers still prioritise the letter as a contact channel when private customers experience payment problems. SMS or messenger services are not used at all, and online portals or app solutions are also hardly widespread at 14 per cent.’

No individual processes for payment default

Another surprising finding of the study: 86 per cent of all private customers with a payment disruption or default are treated in the same way using a standardised process. Only 7 per cent of the insurers surveyed assign the private customers concerned to predefined groups on the basis of defined key figures and treat them according to the previously defined procedures – or even treat each private customer on a situation-specific basis.

Jürgen Balgheim, Partner at Krause & Schopp: ‘In our experience, the selection and implementation of new billing software in the area of collection/disbursement alone is not enough, as numerous practical examples show.’

Customer retention not in focus

Customer centricity, i.e. a consistent focus on the customer, is considered one of the most important success factors for companies in the digital age. The latest ibi study paints a worrying picture when it comes to collections and disbursements in the insurance industry: for 51 per cent of respondents, maintaining the customer relationship is not at all the focus of processes in the event of payment disruptions. 42 per cent confirm that their processes are not geared towards finding solutions for payment disruptions together with private customers, while 31 per cent even want to transfer their private customers to the dunning and collection processes as quickly as possible.

The IT industry association Bitkom: ‘On average, insurers’ digital offerings are only rated as ‘sufficient’. Insurers must continue to improve their digital offerings in order to meet the needs of their customers.’

Customer-centred realignment in payment transactions through clear objectives

What can insurers do to realise the potential of customer communication in payment transactions? Our approach is to reposition this area through a professional target image. In our experience, the selection and implementation of new billing software in the area of collections/disbursements alone is not enough, as numerous practical examples show. The use of modern software systems often does not lead to the desired results. On the contrary: during implementation, there is a transition phase that not only causes higher costs due to workarounds, but ultimately also leaves behind dissatisfied customers and frustrated clerks.

Instead, a promising approach lies in the development of a clear professional target image that enables a more comprehensive view of the future. The target image for payment transactions serves as a strategic orientation for the collection/disbursement of an insurance company. It interprets the technical objectives and derives strategic guidelines, perspectives and guidelines from them. The business target picture deliberately takes a long-term view of the future – over a period of five to fifteen years. This future-orientated perspective outlines an ideal image from a great height, whereby the obstacles of day-to-day business are ignored for the time being. However, the consistent focus on the customer (customer first) ensures that the target vision remains grounded at all times.

‘For 51 per cent of respondents, maintaining the customer relationship is not the focus of the processes for payment disruptions, while 42 per cent confirm that their processes are not geared towards finding solutions for the payment disruption together with private customers.’

The basic conditions

Although a professional target image is not a professional concept, it provides a stable orientation framework for subsequent concrete implementation through strategic guard rails and guidelines. Three basic conditions must be met in order to create a target vision:

1. Strict alignment of the functional target image with the corporate strategy and the defined targets.
2. Coordination and integration of the target image with neighbouring specialist areas.
3. Involving employees in collections/disbursements in the creation of the target image, ideally in interdisciplinary cooperation with the specialist department and IT.

The technical target image creates a binding framework for a 360-degree view of insurance-related payment transactions, taking into account the interfaces to neighbouring areas. This creates a customer-centred focus on the strategic contribution of payment transactions for customers and insurance companies.

ibi research study

The study ‘Payment disruptions/defaults in the insurance industry: awareness, prevention and strategies in the private customer business’ was conducted by the renowned ibi research institute at the University of Regensburg (www.ibi.de). The study partners are the companies Krause & Schopp (www.krause-schopp.de), experts in payment transactions for the insurance industry, atriga (www.atriga.com/en), a pioneer in customer-friendly and digital receivables management, and the white label BNPL enabler axytos (www.axytos.com/en).

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