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If you’re in business, complaints are a fact of life. No matter what you do, sooner or later, someone will disagree with the way you handle something. And, in insurance, there are more than a few complaints.

In fact, in Missouri last year, there were over 1,600 complaints by the public against (other) homeowners insurance companies alone. Meramec Valley is pleased that there were O reports in 2009 filed against us with the Missouri Department of Insurance.

Insurer Billing Practices Affecting Customer Retention

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Survey statistics show P&C carriers still struggle to create new bill plans and provide one bill for multiple policies, thereby impacting customer service.

Insurance Networking News, June 10, 2010

Pat Speer

The latest results of a survey find that property/casualty carriers overwhelmingly believe that billing impacts customer retention. Guidewire Software, a provider of core systems to property/casualty insurers, conducted its Billing Market Survey, the second since July 2008.

The Guidewire report holds that a majority of respondents have difficulty creating new bill plans, and more than one-third cannot bill multiples policies on a single invoice, which impacts their ability to serve their customers. The survey statistics also confirm the shift toward direct bill away from the traditional agency bill method.

Analyzing survey responses from more than 40 P&C carriers in North America, survey highlights include:

• The majority of carriers surveyed believe that billing impacts customer satisfaction, and 88% believe that billing impacts customer retention

• Carriers report that the ability to offer flexible payment options to customers is critical, but 60% of respondents have difficulty creating new bill plans

35% of carriers polled are still unable to provide a single invoice for multiple policies

41% of insurers reported they are not confident their current billing systems will meet future needs

• Carriers continue to shift from agency bill to direct bill; 53% of carriers support agency bill today; 19% of the 53% planning to increase agency billing in the next three years; 34% plan to decrease agency billing in this same period

• 34% of carriers surveyed still house billing in their policy administration system, which is contributing to the difficulty creating new bill plans. Fifty-eight percent of this group plan to separate billing from policy in the future. The carriers that plan to keep billing in their policy administration system tend to be the smaller carriers.

The survey results indicate that respondents are more concerned now than they were in 2008 about the direct impact billing has to customer retention. Eighty-eight percent of carriers polled report that billing has a direct impact on customer retention. This is slightly higher than the 2008 results—most likely due to an increase of smaller carriers realizing the direct link between billing and customer retention.

Further, the challenge of uncollected earned premium is now more evenly dispersed between small, medium, and large carrier as compared to the 2008 survey.

Looking at the two surveys together, top challenges with current primary billing systems remain consistent between 2008 and 2010 survey findings:

• Difficulty and expense of system maintenance

• Minimal or no support for access by external agents—systems are not Web-based

• Difficulty of adding additional functionality due to previous custom changes

• Limited billing function built into policy administration system—not a true billing system

• Inability to quickly deploy new and updated billing plans—no change is easy to make

“We would like to thank the carriers who took part in our survey to measure the pulse of the industry relative to billing,” said Kimberly Morton, product marketing, Guidewire. “Today, most carriers recognize the impact billing can have on customer satisfaction and retention. Yet, a large percentage of carriers agree that their current billing system is too inflexible and limited in the functionality needed to support new customer and market demands.”

How to Save on Your Homeowners Insurance

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  1. Raise Your Deductible –  Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher deductible you choose, the bigger discount you get. But, only take a deductible that you could reasonably afford in the event of a loss.
  2. Improve Home Security – Many policies with many companies will give a percentage discount for homes with Central Station Alarms. It’s not usually the 20% that the alarm companies promise, but it’s a few dollars. Plus it is something you can do to avoid a loss, and avoiding a loss is always better (and cheaper!).
  3. Ask About Discounts – Many companies offer Senior Discounts, Non-Smoking Discounts, Smoke Alarm/Fire Extinguisher Discounts, etc. If you don’t ask, they do not know to give them to you!
  4. Maintain a Good Credit Record – If you believe your credit rating is higher now than when you bought the policy originally, check back with your agent. Chances are you qualify for a bigger discount.
  5. Stay with the Same Insurer – Compare what you can save with a new company and new policy to that of your present company and policy. Chances are, you are earning claim free and loyalty discounts with your present carrier and they are much less likely to cancel you in the event of a loss.
  6. Get Private Insurance instead of Force-Placed – If for whatever reason you let your policy lapse and your bank force-placed a policy on the property, you’ll want to try to get your own insurance. It’s cheaper and more comprehensive by far.