Mutual Benefit

PHYSICIANS MUTUAL relies on direct mail as one method of reaching prospects for its individual health and life insurance products. The ability to connect with potential customers has enabled the Omaha-based insurer to write more than one million policies.

In 2006, Physicians Mutual’s 73 full-time print and mail shop employees were responsible for 71 million pieces of mail, including promotional and fulfillment mailings. About 60 percent of those pieces were printed on the Mail Processing Center’s Océ Pagestreams and Xerox color and black-and-white printers, which include a new Docu
Color 8000.

Though the operation has a print-on-demand area for producing business cards, stationery, flyers, brochures and the like, the bulk of the work produced in its 92,000-square-foot facility ends up in the mail stream. By the end of this year, the Mail Processing Center expects to mail 82 million pieces.

A Successful Program

One of the company’s most successful promotional programs is a kit that includes a personalized letter with an attached ID card printed with the recipient’s name. Recipients are pre-approved. All they have to do is call and activate their account.

“Getting the mail piece with the ID card gives credibility to the package,” says Ken Sibilia, vice president for sales support at Physicians Mutual.

Initially, though, Physicians Mutual did not have the right equipment to match the card to the letter and attach it.

“A lot of jobs had been outsourced for card attaching,” says Mike Lesley, lead print operator. To improve control and reduce costs, the company wanted to manage the whole process in-house.

In the past, Physicians Mutual had tried doing the job in its production center by using a simpler plastic clean-release card. It didn’t work well.

“There were problems with stacking, cards falling off, damaging pieces of laser equipment or falling off at the folder,” Lesley says.

In 2005, as part of a major capital investment in its production center, Physicians Mutual purchased two MCS Perfect Match read-and-print systems. The health insurance offer letters include a two-dimensional bar code, which was selected after experimenting with other codes to get the most accurate matching. The Perfect Match system reads the code and prints a corresponding name and account number on the card. After the card is affixed to the letter with a Sure-Feed attacher, the letter and card are inserted into a window envelope via a Pitney Bowes inserter.

MCS Perfect Match combines two processes, matching and imaging, to deliver high production rates. The system can handle 16,000 such pieces an hour.

“In 2006, we finished the year with just over 9 million ID cards,” says Sherry Monico, plant manager. “In 2007, we’re targeting 17.3 million cards on those two machines.”

“We’ve had really good luck in being able to use two-dimensional bar code technology on the equipment and improve the productivity on those machines over what we originally were expecting,” adds Aji George, production manager.

The new equipment brought immediate improvements in productivity, costs and quality. The card mailings used to take five to six days to print and fold.

“Now we can knock that out in one to two days,” says George.

The new equipment was installed and tested during the insurer’s busiest time of year, the first quarter. It was done with no down time, and by April the first production mailing was completed. By September 2006, the company was averaging more than 350,000 pieces per day with the Perfect Match. In November Physicians Mutual achieved a single-day insert record of 726,747 pieces—without adding staff.

Physicians Mutual hasn’t tracked response rates specifically to the new card, but bringing the work in-house, with fewer card-related problems, saved money.

“Package costs are less than what they were before getting the equipment,” says Monico, who estimates savings at about $82 per thousand pieces. “For a job with 1 million pieces, this would be a savings of $82,000. This is definitely real money.”

Quality and control improved as well.

“In-house is always preferred,” Sibilia says. “It allows for tighter controls and better management of customer names.”

It also reduces the inevitable errors that occur when names have to be manually matched.

“By having a system that does digital matching through optics, you take away the chance that the card and letter get out of order,” Sibilia says.

One selling point of the MCS equipment was its flexibility. The machine can be used for multiple purposes. For example, the company formerly had to apply labels when sending referral newsletters.

“The partnership between Pitney Bowes, Sure-Feed Engineering and MCS is fabulous,” George says. “The training we received was timely, and they’ve been very responsive. Typically, we’re able to work through anything that comes up. Frankly, there haven’t been a lot of issues.”IPG