Federated Insurance Replaces Billing System, Accelerates Service

Federated Insurance was formed in 1904 by a group of businesspeople seeking better value for their insurance premium dollar. The Owatonna, Minnesota-based company has since expanded into 48 states, specializing in business insurance for selected industries including auto dealers, contractors, parts and equipment dealers, funeral homes, jewelers, machine shops and convenience stores.

Federated is a true multiline company, offering policyholders a one-stop shop for commercial and personal lines, life insurance, and individual and group health. At the heart of the company’s property and casualty business was a 30-year-old billing system that had outlived its usefulness. Built in-house, the system had grown to thousands of lines of legacy code that interfaced with every major system. Simple updates were increasingly challenging and time consuming. New initiatives to enhance billing services and improve collections were put on hold.

“Another factor was the fact that on the business side, people were getting closer and closer to retirement age, and moving forward we were going to have a problem with knowledge transfer if we didn’t start making some changes,” said Becky Dawley, vice president and director of Information Services for Federated Insurance. “So that’s when we started to look at a new billing system.”

Improving Ease of Use

Federated reviewed numerous billing systems on the market and narrowed the list to the top four vendors. Over the years, the company had selected CSC’s software for policy administration, underwriting and life insurance processing, so it was no surprise that CSC’s Exceed Billing made the final cut.

“We looked at business functionality and at that stage very clearly CSC was a winner,” Dawley recalled. “It had the majority of the functionality we needed and we knew we could make some mods or ask for additional assistance from CSC. We’ve also always been impressed us with CSC’s architecture, vision and overall quality of service. It was comforting to us to know that they had quite a large customer base.”

The introduction of CSC’s billing software brought immediate benefits to Federated though improved ease of use. The previous system required users to memorize various system codes and undergo specialized training.

Few employees outside of the billing area, in fact, could answer customer inquiries and resolve problems, which meant that customer service reps typically had to hand off policyholders to someone in the back office to take the information and arrange a call back.

“All questions now come into our client contact center, which is able to answer 50 percent of those billing calls, so that’s a pretty phenomenal change for us,” Dawley said. The upgrade also eliminated overnight, batch processes, allowing the company to apply cash immediately, and it required no manual intervention to create reports.

Supporting New Initiatives

To keep customization of the new system to a minimum, Federated took advantage of CSC’s Innovation Community program, which allows users to submit enhancements to CSC and have them included in the base system — making them available to all users. Federated used the program to provide more detailed but easier-to-read information on premium invoices.

“Our invoices are more detailed, but they’re very concise so they’re easy to read,” Dawley noted. “Even though we had to make some Innovation Community enhancements to the system, we made surprisingly few, which is indicative of the functionality that was in the system.”

The replacement of Federated’s billing system has positioned the company to provide the flexibility to support large accounts. “As we get into larger accounts what we’re seeing is that those large accounts have their own unique needs in terms of what they want to see,” Dawley said. “We need to be able to provide more customized services to those large accounts.”

“Despite all of these changes, our marketing force has been very, very quiet. And usually if we’re going to hear any noise, they’re going to hear it from their clients,” Dawley noted. “For some of the changes that we want to make in the future, we now know that we can make them and we’re moving forward with them.”

Staying Continuously Up to Date

Another major benefit to CSC’s software was moving from an out-of-date unsupported system to a modern, continuously updated one. Federated licensed version C.0, which means the software is kept current through CSC’s Continuous Delivery Program. Under the program, CSC releases small updates to the software every few weeks, allowing organizations to upgrade incrementally instead of every year or two — or not at all.

“We think that we’ll be able to stay current much more effectively than with perhaps any other products that we have, especially on the application side,” Dawley said. Looking ahead, CSC’s software has the flexibility to support billing and collections across all lines, including life and health. “At some point in time we may well consider that,” she added.

Throughout the projects, Dawley said she’s been impressed with CSC’s responsiveness to issues that have arisen.

“CSC has done a great job of listening, and I can honestly say that we have not worked with another vendor that has been as customer-focused as CSC. And it’s not just lip service. They truly listen. We can see the progress as a result of the feedback that we’ve given. And they hold themselves accountable for that.”