Why insurers need to leave paper checks in the past
Insurers are becoming more digitally-based, data-driven organizations that are investing in the customer experience to address the new expectations of today’s consumer. But at the same time, there are always some old habits that die hard – habits that need to change but somehow remain the same.
Today’s consumer is doing more and more online or on a smartphone every day. We pay for coffee with an app; we pay with our eWallet at the grocery store; we transfer money between our bank accounts on our smart-phones. With services like Venmo and PayPal, we are able to pay friends and family electronically. Consumers have come to expect this ease and convenience in every area of their lives.
When it comes to insurance, we are seeing things change. Insurers have taken steps to create an easy and efficient process for their customers from quote to premium payment to claims intake. So, the payment process has certainly transformed in insurance… but only to a point. The next step in the transformation needs to come at the moment that really matters for an insured – the claim payment.
Paper checks are still substantially used by the industry to provide outbound payments in the claims process. Checks are one of the most expensive forms of payment and create a delay in accessing the funds. All parties involved with the payment process – claimants, third parties, mortgagees, and lienholders – are looking for a change in the traditional check process. It is easy to imagine how a positive experience could quickly be forgotten if a customer has to wait for a paper check.
Insurers must take the next steps to meet growing customer expectations. The good news is that as fast as customer expectations are changing, new payment technologies are becoming available. While there will be challenges to address to make it happen, insurers may soon be able to put the paper check to rest.
Strategy Meets Action’s newest report, The Payment World Explodes: The Need for Digital Customer Experiences Is Driving Payment Innovation, offers insights into the state of payments in the industry today and the direction that payments are headed in the future. To learn more or to purchase the report, visit strategymeetsaction.com/our-research.
This blog entry has been reprinted with permission from SMA.