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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...
Gone are the days of default customer loyalty and complacency. Today, people want the ability to research, compare, engage with, purchase from, and have ongoing access to their favorite brands. At any time, from any place, on any device, both online and offline. With the option to choose between automation and a human representative - preferably one who can communicate effectively with a pleasant blend of empathy and humor. And if the company is environmentally and socially responsible, all the better!
(Sounds easy enough, right?)
On the flip side, brands that don’t meet these standards are often perceived as inadequate, illegitimate, or even sketchy. In the age of hyper-connectivity and prerequisite social proof, a healthy and active digital presence is essential for attracting customers and earning trust.
In the early days of digital disruption, financial institutions enjoyed a rare reprieve from the rapidly evolving consumer expectations. This leniency was especially helpful, given the industry’s long-standing reliance on traditional processes and legacy technology.
However, with the recent surge of digitally agile market newcomers – including Amazon, automakers, and startups – established insurance companies are now feeling the pressure to create a competitive customer experience on par with current trends. Though off to a late start, insurers are now racing to future-proof their companies, starting with key business functions for maximum impact.
As the most critical event in the customer journey, claims have emerged as a logical focal point for the industry’s modernization efforts. In response, the insurtech community has developed a wide range of solutions to address nearly every facet of claims management. From mobile FNOL apps to a full matrix of machine learning, data analysis, and even drone surveillance — there’s no shortage of innovation in the digital claims arena.
Because many insurance companies are still tied to older core systems, partnering with third-party insurtechs has allowed insurers to leverage modern technology without the cost and upheaval of a complete systems overhaul.
The recent digitization of the claims process has led to a natural conjunction with the industry’s other fast-moving area of transformation: payments. Whereas inbound digital payments has been steadily gaining momentum throughout the past decade, digital claims payments have only recently entered the spotlight as an elegant, attainable solution for enhancing the customer experience in this pivotal moment in the relationship.
As digital claims payments continue to grow in the mainstream market, insurers are beginning to see the powerful potential of this final piece of the puzzle. Of course, timeliness has always been a priority. But how the payment itself is handled can be a deciding factor in your customer’s decision to stay with your company after the claim is closed.
Let’s take a step back for a better “before and after” view. Historically, people had to wait days, or even weeks to receive their claims payment in the mail. Then, they’d have to deposit the check at the bank, where the funds could be held for up to 10 days before finally being released into their account. Although unavoidable back in the days of checks and snail-mail, this delay was often just enough to drive the customer look for another provider.
By contrast, today’s digital capabilities allow policyholders to choose how they want to receive their money – up to and including instant payments. Empowering your customers to select their preferred payment method puts the control back in their hands - which, after a loss, can sometimes be as valuable as the financial relief itself. By offering multiple payment options, personal empowerment, and a faster claims settlement, insurers are able to give their policyholders a more positive experience amidst an otherwise stressful life event.
The benefits of digitizing outbound payments extend across the entire organization, including:
1. COMPETITIVE ADVANTAGE
Businesses gain a significant competitive advantage by giving payees the opportunity to choose from a variety of payment methods. (2018 Visa-Aite)
2. CUSTOMER RELATIONSHIP
Emotional bonds between the organization and consumer are strengthened by offering a variety of payment methods. (2018 Visa-Aite)
3. CUSTOMER EXPERIENCE
79% of consumers consider real-time payments to be an important or extremely important part of their experience. (2018 Visa-Aite)
4. CUSTOMER PREFERENCE
62% said they would likely or definitely choose instant payment options if given the choice. (2018 Visa-Aite)
5. CUSTOMER RETENTION
Satisfied customers are 80% more likely to renew their current policies than unsatisfied customers. (2019 PropertyCasualty360)
6. SETTLEMENT SPEED
75% of consumers want faster payments. (2019 PMNTS.com)
7. COST REDUCTION
79% of insurance carriers surveyed cited reduced cost as the most significant benefit to automation. (2018 LexisNexis)
Digitizing claims functions improves claims-adjustment efficiency and expenses by 20-30%. (2017 McKinsey)
9. VENDOR RELATIONSHIPS
Over half of B2B payees favor digital disbursements, whereas checks are consistently ranked as the least preferred payment method. (2018 Statistica)
10. CROSS-DEPARTMENTAL ROI
Digital claims payments help insurers improve customer acquisition and retention, lower claims costs and claims leakage, reduce payments fraud, and shorten the claims cycle. (2018 Claims Journal)
In today’s fastidious consumer culture, brand loyalty is earned through a continuous and genuine effort to engage with policyholders throughout the entire customer journey. As a high-impact touch point, claims – particularly the claims payment – has become a top priority in the industry’s modernization movement. By introducing flexible digital disbursement options, insurers can send payments to their policyholders (and vendors) quickly, efficiently, accurately, and with full transparency – creating the kind of customer experience that inspires retention, persistency, and brand advocacy.
To learn how you can modernize your organization through inbound and outbound digital payments, contact One Inc today!
You might also be interest in:
Insurance Industry: 12 Trends for 2020
Speed Matters: 3 Reasons Why Faster Claims are Better for Insurers
Patricia is passionate about helping insurers continue to achieve success in a rapidly changing industry. She offers news, insights, and tips to help you modernize your organization, boost efficiency, and provide a superior customer experience for today’s policyholders.
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