Customers need their insurer to provide stability, clear communication and financial support during a claim – and to do so in a timely manner. Unfortunately, claimants have had to wait days or weeks to receive funds from their insurance provider, and a check in the mail is often their only payment option.
In today’s digital-first economy, insurers need to innovate their payout processes to offer their customers speed, convenience and flexibility. Imagine enabling payouts that provide customers with a personalized experience and doing so in near real time. With just a point and click following claim approval, customers can control when and how they are paid – reducing payout timelines to minutes or less while providing the payout options that cater to each policyholder’s preference for managing their money.
By digitizing payouts, insurers can transform a critical customer interaction, turning a painstaking process into a truly positive experience.
Fostering loyalty via payout choice
One way to build customer loyalty is to provide claimants with multiple options for how they receive payouts. In today’s hectic world, customers want to manage finances on their terms, but those terms vary widely based on personal preferences.
According to a recent Carat Insights study from Fiserv, which polled more than 2,200 adults in the U.S., two primary issues drive payout decisions for customers: security of the payment (40%) and speed of funds transfer (29%). This research finds that older customers prioritize security, while younger customers are more concerned with getting their money quickly. For example, receiving a payout to a bank account is the familiar and trusted experience for older generations. Meanwhile, millennials and Gen-Z are more accustomed to using digital wallets and increasingly prefer non-bank payouts. These non-bank payout types can include digital wallets that are popular among younger generations, or even payouts made to crypto wallets.
According to the same Carat Insights study, only 38% of insurance customers have ever received a payout digitally – with most consumers thinking that a payout via paper check is their only option. This gives insurers a tremendous opportunity to drive customer loyalty by enabling a differentiated experience, moving money to their customers via the payout method that best fits their personal preferences.
Increased efficiency affects the bottom line
While developing and deploying digital payouts creates a better experience for the customer, it can also create operational efficiencies for the insurer by reducing administrative costs. According to our data, improving workflows, eliminating the administration of paper checks and digitizing the entire payout process leads to a 60% reduction in payout costs and a 25% reduction in call center volume.
At the same time, insurers that use digital payout technology provided by their merchant acquirer can secure additional efficiencies by routing consumer payments — the pay-in — for insurance premiums along the same payment rails as the payout. Similarly, these insurers can also maximize consumer choice by providing their customers an expansive list of payment options – accepting consumer payments for premiums from traditional sources like credit and debit cards, but also via ACH and popular digital wallets.
See also: Payment Processes Must Be Simplified
Paying out in a matter of minutes
Many insurers in the U.S. are beginning to focus on digitizing multiple touchpoints within their claims process. For example, we have been working closely with industry leaders to advance these initiatives via a customer-facing digital portal that gives claimants the ability to accept claims funds and the control to choose how they would like funds delivered.
Once notified by their insurer that their claim has been approved, a claimant is prompted to access the digital portal via their personal device, at which point they can opt for a digital payout instead of a paper check. Claimants choosing to receive funds digitally then select from a list of payout options that include having a digital check delivered instantly via email, payouts sent to their bank account via a debit card or ACH transfer or even having funds delivered directly to their PayPal or Venmo account.
Such digital payout initiatives have successfully paid out millions of insurance claims digitally across our client base – helping these insurers deliver an industry-leading experience for their customers. When paired with parallel efforts from the insurer to expedite how claims are reviewed and approved, some insurance claimants have been able to complete the entire claims process (from submission to payout) with their insurer in less than 20 minutes.
Digital transformation is changing how the insurance industry operates for the better. By digitizing payouts, insurers are creating better experiences, reducing costs and making it easier for customers of all ages to work with their insurer.