Moving from checks to digital payments is more than smart, it’s essential.
Today, insurers are rushing to take advantage of new digital payment platforms built specifically for insurance claims.
The digital revolution is transforming the way consumers and businesses distribute and receive payment. Consumers and service providers increasingly expect fast payouts for insurance claims—choice, speed, and customization have an impact on overall satisfaction. Simply put, the days of mailing paper checks to policyholders is passé.
Among the many benefits, digitizing claim payments helps your organization:
Reduce cost by expediting claims settlements and eliminating the need for checks
Retain customers by delivering faster payments through their preferred methods
Minimize risk by reducing the chances of fraud and human error
Beyond the benefits of an improved customer experience and increased satisfaction, digitizing your claims payments also greatly increases the efficiency of your own internal operations. A claim is not settled until the payees have received and accepted the payment. For every day a claim remains open, there is additional cost to the insurer (for example, paying another day on a rental car or hotel room). A faster claims process lowers the risk and costs associated with delayed settlements, including claim severity, loss adjustment expenses (LAE), and extended litigation.
With the right digital payment approach, you can:
Raise your Net Promoter Score (NPS) 25% compared to your peers.1
Reduce payment related service calls by 50%.2
Reduces banking and treasury fees.3
1. Source: Treasury Today
2. Source: Treasury Today
3 Source: Sarzen, Jay and Baker, Talie. Business-to-Consumer Disbursements in the U.S.: The P&C Insurer Opportunity. Aite Group. 2019
“We’ve tried to quantify our time savings, but there’s just one word that sums up our results—priceless.”
John Kluth – CFO, CCMSI
Slower payments lead to dissatisfaction. Most consumers assert experience as having a critical impact on their decision to stay with their current insurance company, and it’s not hard to understand why. After a loss, people are often stuck in a state of limbo – possibly even suffering — which is compounded each day they are displaced in a hotel room, driving a rental car, missing work, or delaying surgery. The First Notice of Loss (FNOL) is a vital step toward restoring “normal” life conditions.
According to a recent consumer survey conducted by Engine Insights:
said the claim payment process played a role in overall satisfaction with claim experience
said it’s important to receive a claim payment on the day it is approved
said it’s important to receive payments instantly with no holds and deposits
As their insurer, you are in a unique position to either become the hero of their story, or just another obstacle on the path to recovery. Digital payments are the simplest and the most efficient way to expedite the claims process, allowing your policyholders to begin rebuilding and recovering much sooner than with printed checks. By paying through their preferred methods and cutting out unnecessary wait time, you become an ally in the mind of your customers, which strengthens their trust and brand loyalty.
Obviously, when you remove checks from the equation, check fraud is no longer a problem. Some insurers have been reluctant to adopt digital payments due to potential network security risks involved with online exchange of bank account or payment card information. However, this risk can be entirely eliminated by outsourcing to a digital claims payments provider that tokenizes sensitive data, so it never touches your network – nullifying your risk and protecting payees’ payment data.
Malicious attacks are not the only cause of payment complications. In fact, inadvertent mishaps — for example, misplacing the decimal point on a check — can have severe consequences. Digital payments are less vulnerable to human error than manual processes. And while the human component is irreplaceable for many other touchpoints along the customer journey, digitizing payments ensures the necessary precision for accurate disbursement and record-keeping.
Of course, for many insurers, this move to epayments feels like a difficult, expensive undertaking. But actually, enhancing the claim experience to provide the kinds of payments policyholders want at the speeds they expect doesn’t have to break the bank. Not only can VPay help your organization reduce claim costs and keep policyholders satisfied, but you will start seeing a positive ROI within 45 days.
Our largest clients report saving more than $1,000,000 every year with VPay. We’re ready to help you do the same.
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