Insurers: Why Sort Your Own Mail?

Insurers: Why Sort Your Own Mail?
Written by Tritek Blog on July 20, 2021 in Tips

Even in the digital age, insurers and other businesses generate lots of mail. Applications include claims, policies, billing, correspondence, checks, notices, statements, and more. Managing postage spend is always a concern, which means sorting the mail to take advantage of USPS workshare discounts is a smart strategy.

Presort services exist, but many insurers create enough local and regional mail to make sorting their own mail a reasonable alternative.

 

What is Presorting, and How Do You Do It?

Presorting the mail means sorting individual mailpieces and grouping them to enable more efficient delivery by the US Postal Service. Companies sorting their own mail use two methods, usually together.

The first method is to sort the data into zip code sequence before printing. Sometimes companies sort and group the mail even more finely, thus generating a complete automated mailing without ever rearranging the order of the physical envelopes. This is rare, however.

Most organizations run several print jobs every day. Though they may sort each job by zip code, few companies can sort the data for an entire day’s mail and create one giant print stream. Jobs are ready for printing at different times and companies can’t wait until the end of the day to start printing. Also, print applications use different paper stock, outbound envelopes, and return envelopes or inserts. Document operations must process the jobs separately to accommodate this variety in physical composition.

The second method of presorting takes place after documents are printed, folded, and inserted into envelopes. Operators feed the mail from multiple daily jobs into a machine equipped with a high-speed multi-line optical character reader (MLOCR). The sorting machine looks up the address on each mailpiece, sprays the postal barcode on the envelope, and sorts mail into bins or pockets. As the bins fill, machine operators unload the envelopes into mail trays, mark them, and stack them on pallets for transportation to a USPS facility.

 

Benefits of Presorting Your Mail

The largest benefit of mail presorting is a reduction in postage. When mailers do some of the work, the USPS rewards them with workshare discounts, which can reduce an insurer’s postage spend substantially.

Presort postage discounts depend on the number of mailpieces to be delivered to a particular area. Groups of mailpieces destined for the same 5-digit zip code qualify for greater discounts than groups addressed to a 3-digit area, for example. Groups must include at least ten pieces to be eligible for a presort discount. If an insurer’s mail is relatively dense, meaning they have lots of mail addressed to a small geographic region, they can qualify most of their mail for a postage discount. They needn’t mingle their mail with that of other mailers to reduce their postage costs, as is done with outside presort service bureaus.

Presorted mail tends to get delivered faster, since mailers have already grouped and packaged the mail for delivery to USPS regional facilities. The postal service skips the sorting steps and begins transporting the mail right away.

 

Why Presort In-House?

Mail generated by insurance companies is particularly well-suited for presorting. Insurers often serve a consistent group of customers from regional processing centers. This increases mail density and allows insurance company mail centers to define sort schemes they use every day to process the mail.

Besides the postage discounts and faster delivery benefits offered to all presort mailers, those who presort their own mail enjoy other advantages:

Keep All the Discount — Presort service bureaus charge fees, usually by keeping a portion of the postage discount for which the mail qualifies. When insurers or other businesses sort their own mail, they save more on postage than they would by outsourcing this work.

Later Cutoff Times — To get all the mail sorted and delivered to the Post Office by the USPS deadline, presort service bureaus must pick up mail from their customers in the afternoon. Companies sorting their own mail can work well into the evening, qualifying more of their mail for discounted postage and inducting some of their mail a day earlier. For some applications such as bills, this one-day acceleration in the process can make a difference in days sales outstanding and cash flow.

Security and Accountability — Given the nature of their confidential correspondence, many insurers prefer to maintain control of their mailpieces until they deposit the mail with the USPS. An in-house mail sorting operation gives them this option. The organization can track important documents such as policy cancellation letters through the document production process, including the date the documents were inducted into the USPS delivery network.

For more details on the way presort bureaus work, see THIS ARTICLE.

 

Available from Tritek

Tritek Technologies builds mail sorting equipment to meet the needs of insurers based on their mail volume, production schedules, sortation density, and physical space. Our superior reading technology allows Tritek machines to process mail often rejected by other equipment. CLICK HERE to review our product information for presort mail equipment.

Many of our customers use our versatile sorting machines to distribute incoming mail in the morning and process outbound mail in the afternoon. Our flexible design and intelligent software make this possible, improving the ROI on sorter equipment purchases.

Contact us to assess your mail sorting needs. By analyzing your mailings we can tell you the best way to achieve postal savings and realize other benefits important to your organization.

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