Five Reasons Claim Payments Belong at the Top of Your Digitization Priority List
Digitization is a complex, enterprise-wide undertaking that impacts dozens of intertwined processes, systems, and functional areas, but payment digitization delivers the fastest, most reliable return on your investments. Here's five reasons why.
Today, virtually everyone in our industry understands and embraces the value of digital transformation. And every insurance company is actively working to implement a smart, innovative digital transformation strategy that will streamline their claims operations, deliver better claims experiences, and ultimately provide a competitive edge in a tough market where efficiency and customer satisfaction matter more than ever.
But as we all know, digitization is a complex, enterprise-wide undertaking that impacts dozens of intertwined processes, systems, and functional areas. So where should you focus your efforts? What elements of the overall claims process will benefit most from investments in digitization? And what specific areas can deliver the fastest, most reliable return on your digitization investments? Different insurers will likely have different answers to these questions, depending on where they’re at in their digital journey. But for a growing number, claim payments belong at or near the top of the list.
Here are five key reasons why:
1. The past two years have upended policyholders’ payment preferences and habits
People have been moving steadily toward faster and more convenient forms of digital payments for years. But the COVID-19 pandemic created a sudden, seismic shift in payment preferences that no one could have predicted. Today, nearly one in three consumers say COVID has caused them to fundamentally change their primary method for making payments. And 37% of consumers say they’ve increased their use of instant peer-to-peer payment services like Venmo and PayPal. Today, people simply expect fast, convenient digital payment options in every area of their lives. And if you can’t offer them, a growing number of policyholders—including 90% of GenZ policyholders—are willing to switch to a provider that can.
2. Claim payment experiences matter to your customers now more than ever
For decades, policyholders were perfectly happy with paper checks and ACH payments. But today, according to a recent VPay and Engine Insights Survey, a full 95% of policyholders say that the ease and convenience of claim payments, the speed of those payments, and the ability to access funds quickly has a direct impact on how satisfied they are with their insurer. In other words, the tried and true check/ACH status quo is no longer good enough—and you should be actively working toward offering your policyholders a wider range of modern payment options, including instant claim payments.
3. Claim payment digitization delivers a fast, predictable ROI
Claim payment digitization can have a clear, well-documented impact on customer satisfaction. But it also produces a significant list of practical and immediate cost savings. First, digital payments instantly eliminate the costs of printing, mailing, and processing paper checks. Getting claim payments to policyholders faster can also reduce car rental fees, storage fees, and other claim-related costs that grow when policyholders wait days or weeks for claim payment checks to arrive and funds to become available.
4. Digital claim payments help improve safety, security, and business continuity
According to a recent Delloitte.com article, the COVID-19 pandemic quickly made safety, security, and business continuity a top priority for insurance companies—as they scrambled to protect their employees and business partners, update crisis management plans, and maintain their operations with minimal disruptions to policyholders. Through this unprecedented situation, insurers that still relied heavily on paper-based payment processes found themselves at a distinct disadvantage and struggled to adapt to new work-from-home models and other COVID protocols. By digitizing your claim payments, you enhance your ability to respond, adapt and maintain your operations through unexpected emergencies.
5. Claim payment digitization is easy to implement and within your reach
There’s certainly nothing simple about moving from paper-based to digital claim payments. But a partner like VPay has the specialized technology, knowledge, and experience in place to do most of the heavy lifting for you. As a result, digitizing claim payments can become an affordable, self-contained digital transformation win that delivers results quickly.