Press Office Feature : Software in the cloud is heaven sent for the funeral industry
|Posted:||26 May 2011|
As in any service industry, when the demand declines, only the fittest companies will survive.
So what are funeral parlours and funeral insurance providers doing to stay ahead of the competition? IT solutions expert, Chris Ogden (Pictured right), says that the answer lies in using the right software.
In 2009, on average, over 1,000 people were dying of AIDS every day. By 2010 this figure had dropped to around 530 per day (see the 2010 Country Progress Report to the United Nations and the 2011 figures released by the Actuarial Society of South Africa).
These numbers show us that South Africa's funeral industry has been placed under enormous pressure by the AIDS pandemic - the kind of pressure that has cracked the operational weak spots in the funeral insurance business wide open.
The challenges start at the bottom of the pyramid: funeral insurance falls within the ambit of micro-insurance and caters primarily to the lower income market.
The administration of commercial funeral policies is mostly undertaken by the funeral parlours themselves. Many also offer their own insurance schemes.
Their problems arise mostly in four key areas:
Cash collection: The funeral insurance business is largely cash-based which places an onerous burden on the business owner. Cash collection is laborious, costly and highly vulnerable to fraud and theft.
Unpaid policies: Communication channels with the policy holders are unreliable. This makes it difficult to collect payments from policy holders or to inform them when their policies lapse. As a result, policies may not be covered when claims are lodged.
Capacity: Administrators often do not have the capacity to manage large amounts of data. Many struggle with managing claims and find it difficult to cope with the procedures for dealing with arrears and non-payment of contributions.
Manual accounting systems involving receipt books and handling of cash can add to the inefficiency.
Fraud and theft: Fraudulent claims are a major headache thanks to the brisk trade in forged death certificates for allegedly deceased policy beneficiaries. It is also very easy for intermediaries involved in cash collection to abuse the system.
This is a litany of operational woes that can undermine the best intentions of the service provider.
When you have a dissatisfied customer who is in the midst of bereavement, you can be sure that everyone at the funeral will know about it. First you lose premiums, then you lose customers and, finally, you lose your business.
Ogden says that computer technology has made it very easy to develop products that can solve these problems. He recommends that all funeral services should invest in proper business management software designed for funeral administration.
"You should select a system that you can customise to suit your business", he says.
Web-based systems are ideal because all the transactions are done on line and the data is stored 'in the cloud', which eliminates the risk of theft or the loss of data.
The web-based function also allows administrators to operate in the field, anywhere, anytime - you can take your laptop and your wireless receiver with you and serve your customers where they are. And your sales force can easily be trained to use the software.
With all transactions correctly recorded, the entire operation can run efficiently. You can issue accurate quotes, create funeral files, complete BI1663 documents, automate your receipts, keep track of payments, manage your customers, manage claims, coordinate customer orders and instructions, implement debit order collections and much more.
Furthermore, since the software allows you to monitor and track all the areas of your business and see what all your administrators are doing you can quickly identify problems, prevent fraud and theft and make business decisions based on accurate data.
Ogden says that his clients see an immediate improvement in their premium collection when they implement better systems.
He tells of the jubilation recently expressed by the owner of a funeral parlour who collected an extra R150,000 in premiums within the first month of using his new software.
"Using appropriate software is indispensable for operators in the funeral business", says Ogden.
The result is sustainable income for the business, efficient delivery of services to the customers, trouble-free funerals for the bereaved and a competitive advantage in a tough industry.
Chris Ogden is the MD of RubiBlue (Pty) Ltd and the developer of EasiPol, South Africa's only web-based administration system designed for insurance administrators and underwriters.
For more information, visit www.easipol.co.za
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