Solving The Biggest Problem In Insurance Payments

Take a slow moving, new technology-phobic insurance company, large or small, and look at how it reconciles payments. Typically, when payments come through, the company sends them through to a bank account on a line-by-line item basis. That, says One Inc. CEO Chris Ewing, is just “nuts.” So what One Inc. sets out to do is solve that problem by completely reinventing the process with their solution called ProcessOne. Ewing sat down with MPD CEO Karen Webster to explain how the solution gets the momentum flowing in the insurance space, transforming a daylong process that normally takes ten people to a ten-minute process that only takes one.

KW: So One is a really interesting venture that is solving a particular problem for the insurance industry. Why don’t you give us a little background – what problem are you solving, and why did you decide to solve it in the first place?

CE: One Inc. build’s software for the P&C industry, which is a very specific niche market. Although it’s very a large market, there are not a lot of vendors that focus specifically on property and casualty insurance companies’ specific needs.

So we build core applications for insurance companies and general agencies. While we were doing that, we realized that of course they have a lot of need for payments and payments solutions. The biggest problem we ran into was that most insurance companies do what is called line item reconciliation. When payments come through, they literally take all of the payments for yesterday, which might be tens or hundreds of thousands of payments, and they reconcile them on a daily basis to the bank account on a line-item-by-line-item basis. That just seemed nuts to us, so we created a product called ProcessOne, which is a payment and reconciliation solution for the P&C space to do batch processing. That was the core problem we solved.

KW: So why has it taken this long for the insurance industry to recognize that this is a problem worth investing in to solve?

CE: It’s interesting because the insurance industry itself is very slow to change, and very scared of new technologies. So there are still a lot of insurance companies – probably more than 50 percent of them – that are still on green screen and main frames as their core applications. The reason why they’re reticent for change is because there have been a lot of big flameouts where companies have spent hundreds of millions of dollars to make core applications and they don’t work. So in general, the industry is slow to change, and since this deals with payments – the most important thing for an insurance company to receive – there’s not a lot of movement in that area.

Because we develop core applications, the very difficult stuff, it kind of proves to our customers that when it comes to payments, we can handle that. So we’re in a unique position to change the payments space through our other software. That’s one of the reasons why it’s taken so long. Traditional payments companies like banks and other software vendors, because they are not in the P&C space, don’t have the credibility to come in and say that they already have these customers using their applications.

That’s the other way get cheap, in that when we sell a core application, it automatically comes with payment processing. They’ve already taken a big risk with us in the first place. That’s how we got going in the payments space, and once we got customers doing well on our solutions, it was much easier to get more customers.

KW: So the insurance ecosystem is a little complicated with the various independent agents that represent a variety of different companies. I know that there are a lot of new models where there are direct agencies, and agents are affiliated with only one company. But what happens in a situation where you have an agent representing multiple companies? Do they have to do something to accommodate the payment processing innovation that you’re enabling?

CE: They do. So the larger agents will take payments, then send those payments on a daily basis through cash reconciliation to insurance companies. Because they might have 30-40 insurance companies, doing that reconciliation is also very hard and takes a lot of time.

We’re solving the same problem, but from a different angle for agents using ProcessOne and our core applications, an agency management system that does it. As a built in piece of that, it makes the reconciliations for those insurance companies payments very smooth and easy to do.

KW: So this would enable an agent to accept payment any which way – cash, check or credit card payment? Does your platform accommodate all forms of payment?

CE: It does. And if they use all forms of payments through ProcessOne, it makes the reconciliation of those on a daily basis really simple. So think of ProcessOne as a traffic cop. At the end of the day, it solves the problem by posting the payments to the various modules. It posts the timing for the bank account payments, and for the payments to go into the system itself. Because it’s at the center of all of it, all of the timing matches up so it’s easy to reconcile.

We can take reconciliation from a daylong with ten people to a ten minute job for one person.

KW: That sounds really compelling. How do you get paid? 

CE: Well, we make money either off of the difference between our exchange rate that we pay and the exchange rate we charge our customers. Or, in some instances, we have convenience fees and get paid that way, through charging customers through different channels.

KW: Are there a lot of competitors in the space that do what you do?

CE: There are none doing exactly what we do. In terms of just ProcessOne, the payment processing solution, we don’t know of any other competitor that has the reconciliation software piece down. There are people that are doing kind of what we do, but they don’t do the reconciliation process the same way. We also add on other products into the solution that we give the customers for free.

For example, we have a product called ContactOne. What that does is automatically call out insurance companies’ customers when their policy cancels or they don’t make a payment. There will then be an option press 1 to make a payment, or press 2 to talk to customer service. That outbound reach is very powerful, and increases the payments we get and also helps the insurance companies’ retention. That’s one of the most important things for their profitability.

When you add up all of those solutions that we give as one payment platform, it’s very difficult to compete.

KW: And this came out of your own experiences in the business?

CE: Yes, I used to be the President and CEO of a managing general agency, which is very similar to what an insurance company is but it acts like a PTA. So we had all of these same issues, and that’s where all of these ideas came from. It’s going very well.

KW: So give us a sense of the traction you’ve got. You guys have been around since 2006, I understand? 

CE: Yes, we have, and we’ve been offering ProcessOne as a product for about the last year. We now have over 20 customers.

That’s the other interesting thing is that insurance companies are very large, so if you’re getting a customer, you might get $20 million to over $250 million in processing with one customer. We’re getting tons of traction.

I can’t say who it us, but we just one an RFP with one of the largest insurance companies in the world. We went up against 20 different people that responded to the RFP, and that one will be gargantuan.

KW: One of the things that’s interesting if you look at the B2B payments space there’s a ton of friction that exists in the business of businesses paying one another/. One of the biggest points of friction is the data that travels with the payment. Isn’t that one of the things that your app does – make reconciliation much simpler? 

CE: Exactly. That’s why we call it the traffic cop because we control when the payments go through, and all of that data around the payments, we can then create solutions in reporting that matches everything up. It’s pretty cool.

Chris Ewing
CEO, One Inc.

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