Amid increased competition, economic uncertainty and increased customer expectations for speed and convenience, digital payment capabilities have emerged as more than just a better way for property and casualty insurers to collect premiums, pay claims and reconciled transactions. They are quickly becoming a competitive option for operators looking to increase customer satisfaction and retention, reduce costs and enable next-generation operating models.
As the world has grown steadily more digital over the past decade, the ability to make and receive payments through mobile and online channels has become an essential element of modern business. According to
However, while most industries have made the necessary technology investments to meet this demand, paper checks continue to make up a significant portion of transactions in the P&C sector. This is a massive opportunity. That is why.
From basic transaction to strategic differentiator
In an industry that is literally built around financial transactions, payments are no longer incidental to the customer experience. They are internal to him.
Today, 85% of consumers prefer digital payment options when transacting, and 95% rate speed of settlement as a key factor in satisfaction. Meanwhile, the consumer segments most familiar with paper checks aren’t growing any younger. According to a survey by
This is no small matter. According to
Modern digital payment capabilities can create an opportunity to transform the claims experience by generating new efficiencies – and competitive advantages – for carriers in several ways, including the following:
Simplified premium payments
Premium payments represent the single most frequent interaction that policyholders have with insurers. For all the reasons I’ve mentioned, the ability to make payments with ease may increasingly become a necessity for digitally savvy consumers. In response, a growing number of other insurers are starting to offer options for CNP transactions, mobile wallet payments, text payments and more. This flexibility and convenience can help insurers attract and retain more customers.
Prompt release of requests
According to a recent survey by Mastercard and VPay,
Simple operations cost savings
Today, payment processing accounts for up to 28.5% of P&C insurers’ operating costs. However, processing and sending checks can cost 70 times more than a digital payment. Whether inbound or outbound, digital payments can help operators reduce administrative costs, including check processing, postage and storage. And because payments are immediate, they can improve cash flow by receiving premiums and making claims payments faster, while streamlining reconciliation, reporting and compliance operations.
Accelerated product innovation
Major industry trends, such as the growing importance of integrated insurance and other alternative forms of distribution, are based on digital payments. As technologies like blockchain, AI and machine learning improve the accuracy, speed and security of digital payments, insurers can offer more personalized payment options and services. They will also be able to integrate digital payments with other technologies, such as Internet of Things (IoT) devices and chatbots, creating seamless—and even “
The opportunities offered by digital payments are as compelling as they are urgent. As an increasing number of P&C insurers replace legacy systems with flexible, cloud-based platforms, it is reasonable to expect that by 2030, those who are the fastest to benefit from digital payments will gain a share of significantly compared to rivals.