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The Pandemic Has Boosted Mobile Payments – But There’s Still Potential for Insurers to Tap
In March 2020, the Merriam-Webster Dictionary added contactless to its word list1. They define it as relating to or...
Jul 27, 2021 8:00:00 AM
To account for a reduction in driving during the pandemic, auto insurers gave back more than $18 billion in premiums, according to Insurance Journal1. That’s a great deal of money, but unfortunately, not all auto insurance customers noticed. A J.D. Power study2 found that only about 52% of auto insurance customers knew about the refunds. Those who were aware of the refunds had a more positive perception of their insurer’s brand than those who did not.
But refunding insurance premiums has been a tricky business. According to Property Casualty 3603, some insurance companies provided a credit, while others offered a one-time refund. It takes time to calculate and process all of these credits and refunds, and maybe that’s why marketing and communication efforts have seemingly lagged. No matter the reason, it’s evident insurers didn’t effectively communicate their intentions or adequately leverage the opportunity to deepen policyholder relationships at a time of uncertainty.
According to Car and Driver4, a report from the U.S. Public Interest Fund found that the premium refunds haven’t kept up with the promises made earlier in the pandemic.
To customers, this is frustrating. It may also be perplexing. Why are insurance companies having such a hard time sending refunds? After all, insurers process payments all the time. It should be easy.
But that’s not exactly true. Insurance companies process premium payments all the time, yes, and they process claim payments – but COVID-19 refunds that had to go to every single customer are a different matter. At the same time, many insurers still use paper checks for outbound payments, and that takes time and resources, especially when it’s done on a scale this large.
Things might have been different if insurers had already adopted a digital payment disbursement platform.
While most insurers have accepted inbound digital premium payments for a while, many have been slower to adopt an outbound digital disbursement strategy. In fact, many insurers only use outbound digital payments for insurance claims. This begs the question … why stop there?
The answer is … there’s not really a good answer. It’s time for insurers to see how else they can leverage the convenience, cost-savings and efficiencies made possible by digital disbursements.
Insurers can use digital alternatives for many payment use cases, including:
The volume of digital payment options has exploded in recent years. Providing multiple options is the only way to make sure you’re covering your payment recipient’s preferred method and channel. Insurers already know that inbound digital premium payment options can improve policyholder and agent experiences – thereby hiking satisfaction and retention rates – while also reducing the occurrence of late or forgotten payments. Outbound digital disbursements offer similar benefits including speed, convenience, security, and cost savings – no matter the volume or frequency.
With One Inc, you can deliver a frictionless payment experience – all from a single platform. Why wait another day to learn more? Talk to sales or schedule a customized demo.
The One Inc Content Team strives to provide valuable insights about digital trends and payments innovation for the insurance community.
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