Tag Archives: digital payments

Payments at the Speed of Light

While the processing of inbound and outbound payments in insurance isn’t exactly known for its speed, there are significant advancements being made by both insurers and solution providers to hasten delivery of payments and expand payment options.

A digital interaction actually happens at the speed of light – it is immediate and, being digitally based, can be controlled precisely. Insurers are now looking at sending invoices to their policyholders in the method of the policyholder’s choosing – email, SMS or even a digital wallet. The consumer can now start to change the method of payment in real time.

Consumers also want their money delivered at the speed of light, but outbound payments are still generally made by check.

Recently, SMA held an Insights to Solutions virtual event that focused on the transformation underway in the Digital Payments space. Of the insurers registered for the event, a resounding 83% stated that improved customer experience is a key motivator as they look to adopt digital payments. 67% of registrants envisioned digital payments as a key element of their digital strategy and road map.

Many of the changes needed to transform the outbound experience were also profiled at the event. The shift to digital payments requires an adaptation of people, processes and technology to make the experience successful for both the sender of the funds as well as the receiver.

At the event, we explored the impact of COVID-19 on payments. No one wants to send someone into the office just to print a check. 64% of the registrants were looking to reduce their reliance on paper checks, and 53% were seeking to reduce internal processing expenses.

The interest highlighted a focus on operational efficiency that includes offering the claimants options on an array of payment methods that are “best-fit” based on circumstances – the line of business, amount, etc.  

See also: How Claims Process Must Drive Change

Even for those who pride themselves on being high-touch, an interaction with a person does not always best serve a customer. At times, the speed and efficiency of a digital process – including immediate payments – are better. 

COVID-19 has accelerated many digital payments initiative, because advancements are needed now. There was always a need. Now there is also urgency.

3 ‘Must Have’ Digital Investments

Disasters – such as pandemics – have a way of revealing the need for change. That’s why digital transformation has advanced five years in about eight weeks. Businesses of all sizes have embraced digital sales and service, and, due to lockdowns, just about everyone has experienced the increased need for digital engagement, with expectations only rising. 

For P&C insurance, the pandemic has brought digital strategies and investments into sharp focus and revealed, in real time, which digital investments are delivering high value, and which are not. It has also exposed our gaps and elevated capabilities that were once perceived as less important to higher levels of significance. 

SMA’s latest market pulse research on the impact of COVID-19 and our ongoing advisory work with insurers have revealed that this pandemic has reshaped and shifted digital investment priorities. 

Three “must have” investments have emerged as focus areas this year: Digital Platforms, Digital Payments and Digital Communications.

Given the shift in focus, SMA has just published reports on these three critical areas and completed the Insights to Solution Series, which are virtual events showcasing strategic insights, panel discussions and virtual tours by leading solution providers across all three areas.

Digital Platforms. It is essential to accelerate the digital enablement of sales and service capabilities for policyholders and agents/brokers with a modern platform and connections to core systems. These platforms enable new servicing, sales automation and straight-through processing (STP) by leveraging transformational technologies like AI, bots, IoT and wearables. 

Digital Payments. There is a renewed urgency to transform inbound and outbound payments by moving away from physical paper checks and payments and creating digital experiences and virtual digital payment capabilities. Digital payments are crucial to delivering a highly tailored customer experience as well as improved operational performance.

Digital Communications. Digital interaction and delivery for communications with prospects, agents and policyholders are increasingly essential. This includes digital communication tools like chatbots, voice and business texting, and the tools to capture, create and manage forms, documents, correspondence and messages to support interactions.

See also: Will COVID-19 Be Digital Tipping Point?

2021 may paint an entirely different picture, but, for now, P&C insurer plans are full steam ahead with digital transformation investments.

Digital Outbound Payments Heat Up

The heat of summer is kicking in around the U.S., and the temperature is rising, too, in the digital transformation in one area of the market: digital outbound payments in claims.

Since February, the pace has accelerated beyond what we even thought fathomable. COVID-19 has been horrific, but it has brought clarity about the areas that are urgently in need of digital transformation.

SMA recently published findings from our latest market pulse survey, titled P&C Tech Plans in the COVID-19 Era. The report reveals that fully 81% of personal lines insurers and 57% of commercial lines insurers are investing in digital payments. 

In January 2019, I wrote that this area was positioned to explode. The focus on enhancing the customer experience was pushing P&C insurers forward. The digital payment process possessed the potential to provide operational improvements, especially in efficiency. The flexibility around payments became the target of many critical initiatives.

See also: Cloud Computing Wins in COVID-19 World  

Fast forward to May 2020. When we went into lockdown, we quickly realized which activities required intervention – those that required people coming into the office to print paper checks to be sent to customers and third parties. It becomes obvious that this is low-hanging fruit, and a plethora of vendors have solutions in the market today.

Join SMA and TDI on July 15 for a first-of-its-kind industry event that showcases the capabilities of digital payments and how vendors are bringing these capabilities to life.