Over the last 18 months, insurers were pushed to communicate, service, process manual payments and win new business without risking the health and wellbeing of those accustomed to an in-person operating model.
With mail systems under significant pressure amid severe weather and a notable increase in volume, the need for safe, efficient, user-friendly digital payment options has skyrocketed. Individuals and small businesses have faced immense financial stress due to the global disruption and economic downturn of the last 18 months, only amplifying the need to simplify payments.
Payments are at the center of the insurance industry, both for customers paying premiums and insurers disbursing claims. Yet in 2019, 52% of payments were made by check versus 22% across other sectors, signifying the need to overhaul payment processes for insurers.
Policyholders expect carrier interactions to mirror the same level of experience that leading online vendors have achieved, and insurtech can deliver the secure, easy-to-use digital payment options customers want.
Insurtech also improves policyholder retention by simplifying carriers’ most frequent engagement point with insureds — premium payments — and increasing customer satisfaction, while driving significant expense reduction. Most carriers report that more than half of their incoming calls are billing-related. Providing various, easy-to-use payment options and self-service capabilities reduces calls dramatically, freeing call center personnel to focus on more valuable activities.
To reduce expenses, accelerate collections and meet customer demand, insurers must integrate intelligent payment communication engines with dynamic reminders and personalized customer interactions. This will help reduce late payments and costly cancellations for non-payment of premiums. Some of the principal features to look for in an insurance platform include:
- Auto-renewal
- Omni-channel payment options (ideally offering the same superior user experience across each channel)
- An engaging policyholder interface
- Intelligent communications
- Innovative agent portal tools
- Secure payments
Why Now?
The unexpected challenges driven by the pandemic demonstrated that companies that had already made significant investments in digital transformation were far better equipped to pivot and adapt to new operating conditions. Insurance companies that are slow to digitize and modernize their customers' experience will lose policyholders to more agile, customer-centric competitors.
See also: Did You Use the COVID Down Time?
One customer that chose to leverage payments technology experienced a 151% increase in online payment adoption, higher customer satisfaction, a 15x increase in paperless enrollment, an average decrease of 15 hours per week spent on payment reconciliation and a decrease in mailed payments, all within 12 months of implementing insurtech.
Even if many insurance policies don't ever result in a claim, all policies involve billing, payment and collection—customer-facing moments of truth shared by every agent and company. Insurance providers that create a compelling and practical customer experience during these significant moments will emerge with notable competitive advantages in a fiercely aggressive industry.
