Digital payments in the insurance industry have become increasingly popular in recent years, although the insurance industry has been slow to integrate them into its core business. Consumers are adopting digital financial technologies and expecting digital experiences.
Insurers face challenges fuelled by aging legacy systems and high check volume for traditional payables and receivables
Digital Payments: A Win-Win for Insurers and Consumers
Payments are the most frequent interaction between insurers and insureds.
Digital payments offer several benefits for both of them.
For insurers, digital payments can help to streamline and automate the payment process, reducing the need for manual interventions and allowing them to focus on other areas of the business. They can also help to reduce the risk of fraud and errors, as digital payments are typically more secure than traditional payment methods.
With digital payments, insurers can improve customer experiences, reduce administrative costs, and increase efficiency.
For policyholders, digital payments offer convenience and flexibility. Policyholders can make payments online or through their mobile devices, at any time and from any location. This can be especially useful for those who may not have easy access to traditional payment methods, such as checks or cash.
Incorporating Digital Payments Across Insurance Processes
Insurers can use digital payments in a variety of processes, including:
Premium payments: allowing policyholders to make premium payments online or through mobile apps using digital payment methods
Claim payments: shortening the Insurance claims lifecycle by allowing claimants to receive payment online or through a mobile app.
Policy issuance: Insurers can use digital payments to issue policies electronically, allowing policyholders to purchase and receive coverage instantly.
Policy renewals: Insurers can allow policyholders to renew their policies using digital payment methods.
Additional coverage: allowing policyholders to purchase additional coverage or add endorsements to their policies.
The Go-To Digital Payment Options for Insurers
Some of the most common types of digital payments used in the insurance industry include:
Credit and debit card payments: These are the most commonly used digital payment methods in the insurance industry. Policyholders can make payments using their credit or debit cards.
e-wallets: digital wallets that allow users to store and manage their payment information in one place. Policyholders can make payments using their e-wallet by linking it to their insurance account (e.g., Apple Pay, Google Pay, etc.)
Mobile payments: money transfers through mobile payment service apps and QR codes (e.g., PayPal, Venmo, Zelle, etc.)
The Takeaway
Consumers now perceive traditional payment methods as outdated and counterproductive in an ecosystem that is rapidly digitizing.
Insurance C-suite leaders must make wise technology decisions amid competing priorities to deliver big wins around ROI and satisfying their consumers. Digital payment stands out as a low-hanging fruit of any overarching digital strategy in this area.
_________________________________
We are MPL Innovation, a boutique innovation consultancy.
Our mission is to empower our clients by propelling their corporate innovation initiatives to new heights.
With our specialized innovation consulting services, we assist organizations in surpassing their boundaries and unlocking unprecedented growth opportunities.
Follow us ➡️ HERE