Without a doubt, insurance companies are scrambling to meet customer demands for a streamlined digital experience. Large and small providers of home, auto, life and health insurance alike are all looking for ways to maximize their competitive advantage and appeal to a new generation of savvy consumers.
Technology is critical to success and has attracted a range of new players to the insurance space. Insurtech startups like Lemonade, Hippo and Oscar bring fintech agility and new ideas to the space. At the other end of the spectrum, tech behemoths like Amazon, Google and Apple are stepping up their presence in both the healthcare and property and casualty (P&C) marketplaces.
Recent offerings bring the power of artificial intelligence (AI), machine learning, GPS sensors and other advancements to customers and policyholders. Amazon’s new Halo health and wellness wearable, for example, tracks physical activity, body composition, sleep patterns and other markers, making it attractive to life and health carrier. The company’s Ring camera adds to the video doorbell’s capabilities with a home security drone that can fly inside a home or apartment and evaluate unexpected situations. P&C carriers are already intrigued at the prospects for reducing the risks of property damage for policyholders.
Data from these and other applications provides a powerful advantage for insurers and their customers. The industry touts these innovations for their ability to personalize policies and coverage, reduce risk or reward policyholders with reduced premiums for safe driving, healthy lifestyles and other positive behaviors.
The payment processing opportunity
Payment processing is another critical part of the insurance industry’s customer experience. Heightened consumer expectations set another lofty benchmark for insurers. Again, Amazon and other major retailers are leading the charge among consumers, with sleek and convenient experiences that leverage the latest payment methods and technologies.
For most insurers, payments represents an area that’s in dire need of digitization. Many of the nation’s largest insurance companies still receive low marks from customers when it comes to billing and payment satisfaction.
Errors and inefficiencies that arise from complex and dated payment processes come with a high cost. They trickle down to customers and come back to bite insurance providers with higher call volumes, diminished financial performance and a poor brand experience.
Today’s insurance providers still lack efficient processes for payment research, disputes and adjustments. Lacking automation, their processes rely heavily on staff subject matter experts who need to reference multiple systems to manage each payment situation. It’s time-consuming and costly.
Deluxe worked with one insurance company whose previous receivables platform required manual intervention to process electronic payments. With the previous system, accounts receivable (AR) staff received notice of wires and ACH transactions. To post these electronic payments, they first referenced open receivables ledgers in the AR platform, as well as notes from a separate customer service system.
When payments didn’t match an account, employees consulted a spreadsheet with 30 rows of different cash application business rules. Each product had a separate spreadsheet with rules specific to each state. As you can imagine, it took months for new hires to memorize these rules. Seasoned staff members struggled when the rules and processes changed.
Integrated payment processes move the industry forward
Integrated, multichannel receivables processes represent the trend for consumer payments—and the solution insurers need to meet the high expectations that today’s customers bring. Solutions with system-based rules for cash application have naturally evolved to better streamline and speed up several steps of the payment process.
These innovative applications provide insurers with numerous benefits:
- A sleek and modern customer experience that lets customers pay when and how they want, with easy access to account status and information.
- Enterprise-level controls across all payment channels—while still allowing flexibility to meet the needs of individual business units.
- Consistent and predictable results, made possible by replacing staff-based tasks and human judgment with automation.
- Reduced risks of the errors and delays that plague manual processes.
- More satisfied and productive teams as insurers leverage automation and deploy staff to higher value tasks.
Modernizing the receivables experience
Remote Deposit Capture (RDC) applications offer a great example of how technology can vastly improve the customer experience for insurance companies. Consider the vast networks of insurance agents employed by most P&C carriers. Every day, these individuals accept checks and other remittance information directly from customers. Often, these critical payments can languish, waiting for a trip to the bank or posting to the correct account.
For insurers, RDC solutions not only streamline acceptance of premiums and other payments in the field via convenient (and secure) smartphone apps, they can also integrate cash application directly with the insurer’s AR system. Agents capture checks, documentation and electronic information, then immediately match these payments to open accounts. These new capabilities demonstrate a modern process to customers and greatly improve satisfaction.
An even stronger way to build a consumer value chain starts with the bill itself. Convenient digital billing through an online bill payment platform gives customers more ways to pay, from any device. As an added bonus, electronic billers can typically get paid up to five days faster, thanks to electronic efficiencies and speedy cash application.
These powerful hosted solutions like Deluxe Bill Pay make it easy for insurers to issue digital invoices to customers, accept electronic payments and then link the receivables information with lockbox data or in-house ERP systems. There’s no infrastructure to maintain which reduces the burden of technology support, security and compliance for insurers—especially those tied to legacy systems.
Streamlining electronic payment acceptance
Consumer payments now arrive in a dizzying array of channels, from the traditional methods like checks, lockbox, ACH, cards and wires to emerging payment types like Zelle, Venmo, Apple Pay and other faster payment methods. Consumers love the convenience of these near real-time digital options, but for insurance companies who receive them, they can create an increasingly complex and potentially costly payment landscape.
How can insurers (or any consumer-facing business) keep up with this proliferation? Efficiency is a must, as well as establishing a sound foundation for all company receivables. The sooner the organization develops a single process that can accommodate all existing payment methods, the easier it becomes to add new options with control and efficiency.
Smart insurance companies recognize that Amazon and other major online retailers continue to propel the consumerization of billing and payments; the bar is high and will only keep rising. Smarter insurance leaders know that without flexible, scalable and extensible financial operations, they’ll be hard-pressed to navigate these disruptive changes.
Today’s advanced remittance and cash application solutions offer another game-changing opportunity for the industry. Integrated receivables (IR), for example, leverages AI, machine learning and other “smart” technologies to streamline electronic receivables processing.
IR solves one of the biggest challenges for insurers who take in vast amounts of electronic receivables: the lack of corresponding remittance data. It’s a common problem as payment methods go digital but related processes lag behind.
IR tools provide the solution. Their powerful machine learning algorithms scan and “read” thousands of remittance documents—like emails—and extract pertinent details, such as vendor name, payment amount, invoice number and date.
Then, the application compares this data with the insurer’s open file of invoices to create a three-way match: payment, remittance and open invoice. Staff at the insurer make a one-time confirmation that each match is correct; after that, the application’s self-learning capabilities automatically re-associate all future payments for each vendor account.
AI not only speeds this process—faster than any human’s abilities—it continuously learns each company’s unique receivables scenarios. As a result, the IR application becomes smarter with each remittance it touches. With an IR tool in place, insurers can accelerate receivables processing, strengthen business intelligence and save vast amounts of staff time compared to manual workflows.
Tapping innovations in claims and payables
Payables present a final opportunity for insurers to strengthen and modernize their customer experiences. The claims process, after all, represents a significant portion of a consumer’s perception of their insurance provider. Insurers with cumbersome, paper-based processes and limited reimbursement options risk falling behind their more digitally-enabled competitors—especially among younger policyholders. A streamlined digital experience that’s customized to the needs of the insurance industry is a must.
Payment platforms offer a quick and seamless way to overcome this hurdle. They’re especially practical for insurers whose back office or claims departments are burdened with legacy systems, because they leverage existing workflows and require little IT intervention to deploy.
The Deluxe Payment Exchange (DPX) platform, for example, helps insurers issue claims payments faster, while offering policyholders more choice in how they receive their funds. In 2019 alone, the DPX platform processed more than $13 billion in transactions.
Insurers can enable one or more payment methods through the platform, based on their specific organizational requirements. Consumers complete a simple self-service enrollment that includes any bank account and credit card numbers required to issue certain digital payment types; the platform itself securely stores this information.
Options include funding claims payments to:
- Printable eChecks
- Credit cards
- Debit cards
- Direct deposit (ACH)
Platforms like DPX benefit consumers and field-based claims adjusters alike, providing the cutting-edge speed and payment convenience that today’s digitally-savvy insurance customers expect. It helps accelerate adoption of electronic payment methods while simultaneously reducing the staff workload involved in onboarding policyholders for new payment methods.
Delivering a truly modern customer experience
These approaches offer a competitive advantage for insurers focused on improving their billing and payment experiences with consumers and corresponding customer satisfaction with their brands. In an age where Amazon absolves us from dealing with the usual hassles that accompany life’s necessities, a modern experience is key to attract new insurance buyers and retaining valuable existing customers.
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