Transforming policyholder experience through payments

Payments are the most frequent interactions between insurance companies and their policyholders, both for customers paying premiums and insurers disbursing claims. It’s a moment-of-truth that happens as frequently as monthly. Not only is it part of the customer experience, for many policyholders, what happens withthe insurance payout is their customer experience.Thanks to all the digital developments in the payments arena, customers now demand a seamless, user-friendly experience, and they are quick to look for other companies if they aren’t offered this type of service.

“True customer centricity is really to say: how do I understand what I need to deliver for the customer in that moment?”

In recent years, the number of InsurTech companies has grown dramatically, with almost 7,000 firms currently in the market worldwide. These companies work with insurers to integrate disparate systems, automate manual tasks, and enable real-time decision-making. This article explains how insurers can transform the policyholder experience with payments, ultimately to improve customer satisfaction.

How can insurers deliver in the moments that matter to customers?

Before considering how insurers can optimize the payment experience, it’s important to note that speed means different things, and this includes real-time payment for claims. One of the biggest questions is,“How fast can I make a decision?”If insurers don’t do that quickly, anything afterwards doesn’t really matter. So, despite a large number of InsurTechs arriving on the scene, insurers must keep the human element first.

The next question is, “How fast do I trigger a payment?” An insurer could see that there has been a delay in a flight due to the weather (for parametric insurance which is as real-time it gets), and make a decision in real-time, telling the customer their money is on the way. However, that’s only part two of a three-step-process that’s real-time because, now the question is, “How fast does somebody have to access to the funds?”

This is the third element, which gets into the payment world and brings up another question which is, “How much am I willing to pay for that transaction?” Something that’s real time is more expensive than something that takes three days.

Against this matrix, we come to the topic of cost optimization, because too often any kind of engagement with a customer is seen as a cost. This is the wrong mindset for achieving great customer experience and it brings up the most important question of all: “What is true customer centricity?”It’s about empathizing with the customer’s unique situation and providing efficient service to create a positive experience. Customer centricity is really to say: how do I understand what I have to deliver for the customer in their moment of need?

A practical example of this is life cover. The decision for this can take a significant amount of time, however, some insurance products provide an immediate death benefit. When someone suffers a loss, it might be a million-pound claim, but £50,000 is paid out very quickly for them to settle immediate affairs, and this could be claimed back if it turns out to be fraudulent. In this situation the claim would need to be paid out quickly and others could take longer, so when considering customer experience and real-time payments, it means different things in different lines of business.

A positive customer experience is a combination of great communication and appropriate action. An insurer could be communicating excellently with a customer but mess up in the moment of truth when it comes to claims payment, and this ruins the experience.

How can insurers optimize the payment experience?
Maximize Payment Methods

Personalisation has become a priority for insurers and financial services, allowing for a higher level of customer engagement and retention, therefore, it is crucial that insurers allow customers to pay in their preferred payment method. Besides the traditional debit or credit card, customers may prefer to use mobile wallets such as Apple Pay, Google Pay and others or alternative methods such as PayPal and Amazon Payments. Insurers must also ensure that the PSPs (Payment Service Providers)they choose to connect to support the currency of the countries they operate in and can connect to their local banks.

Invest In Fraud Prevention

Every business wants to protect their customers, but not every business knows how to do so. That is why it is important to find PSPsthat offer strong fraud prevention and risk management tools. It is equally important to look for PSPs that are certified and compliant with all the key regulations, such as PSD2 (with PSD3 approaching).

Streamline Payment Operations

Streamlining payment operations seems like a very broad task, but it can be divided into actionable goals in areas such as reconciliation and analytics. Auto-reconciliation, for instance, allows insurers a huge amount of time and resources, and even reduces the potential risk for errors of manual reconciliation.Equally, having a single reporting source that combines the analytics from all your providers will allow you to have visibility into your customers’ transactions, so that insurers can more easily take that data and use it to improve the business and make informed decisions.

Handling payments without an in-house team

It can be challenging to navigate all the payment solutions available, however, building an in-house payments team is often not feasible, as insurers’ resources need to be allocated to other business areas. Insurers can connect with various payment providers to meet their customers’ payment preferences; however, these connections are complex, lengthy, and costly.

The best way for insurers to fully digitalise their payment processes and offer a wide selection of digital payment methods to their customers is by using a payments platform which connects them to the global payments ecosystem. A single integration gives access to any provider or technology in any market. Both collections and payouts are offered with this type of payments platform, so insurers can pay out to customers in any method they prefer.