Is the future of insurance touchless?

The world is rapidly digitizing, but can insurers keep up? Customers can now access almost everything from meal delivery to medical consultations in a few taps, with the expectation of close-to-instant responses from service providers.

Many of those who hold insurance policies may think, “Why should my claim experience be any different?” Why should a policyholder have to wait a month or more for a payout to repair a damaged car, when they could go online and have a brand-new car ordered and delivered in a shorter amount of time?

As parts of the insurance sector have been relatively slow to embrace digitization, manual processing behind claims has changed little over the years. Indeed, figures show that insurers across several leading markets still primarily rely on telephone (51%) and traditional mail (50%) to communicate with policyholders¹.

Insurers have also maintained a protected position because regulations and approvals have proved a barrier to some challengers entering the market².

But the world of insurance is changing.

With call centers under pandemic pressure, office closures and more people working from home than ever before, 68% of millennials and 53% of Gen Xers say that they have opened up to the idea of filing claims online³.

During the pandemic, we have witnessed not only customer expectations dramatically changing, but also digital-first insurance companies strengthening their position in the market⁴. It’s time for insurers to transform with digital experiences at the core, and that means embracing end-to-end touchless claims.

The age of claims convenience

The end-to-end digitization of the claims process could prove crucial to improving customer experiences in the insurance industry.

To offer a truly touchless claims experience, insurers must enable policyholders to submit claims electronically, rather than through a representative. But an end-to-end touchless experience doesn’t stop there.

The claim would then need to be adjusted automatically, with suitable options offered to the claimant based on this automated analysis. Some insurers allow policyholders to upload photos or videos (for example, of damage to a vehicle) which are later analyzed by artificial intelligence. This, at least in theory, leads to a faster and more tailored offering while avoiding manual processing.

In this end-to-end scenario, full or partial payment would then be made at a set trigger point, directly into the claimant’s desired account or platform. At all times, insurers should maintain transparency with the policyholder, communicating clear timings, estimates and any issues that might hold up settlement.

Figures suggest that touchless simply makes for better customer experiences. Customers just aren’t as satisfied with manual processes; there is a 29-point dip in overall customer satisfaction for insurers sending in an adjuster as part of the historic manual process⁵. This suggests that touchless claims could lead to increased customer satisfaction and, ultimately, increased retention.

Insurers have recognized this opportunity. By 2030, it is estimated that 15% of claims will be touchless³. Nearly 80% of auto insurance executives say they are already considering, or are open to the idea of, touchless claims⁶.

However, successfully implementing touchless involves getting several elements right, and one of the most important ones in the overall claims experience is payments infrastructure.

Payment solutions for a new era

A more automated and integrated payments system could help insurers to realize the potential of this new era of touchless claims. For a smoother claims experience, settlements should be transparent, aligned to policyholder preferences and received promptly by the claimant.

Real-time (or near-real-time) payments could enable customers to receive funds more-or-less immediately. This could help someone who’s had their car damaged in an accident get back on the road faster. It could also create a positive correlation with the insurer that paid out faster during this distressing period.

Worldpay FastAccess can enable insurers to settle policyholders’ claims in near real-time – often within half an hour⁷, depending on the recipient’s bank. Combine this with Bankout from Worldpay to unlock payments to people and businesses in over 155 markets and 99 local currencies.

Both technologies could make a material difference to claimants. If, for example, someone is injured on a holiday and requires insurance support to return home, they’ll want an insurer that can deliver funds quicker, right to where they’re needed.

An equally seamless experience is important when customers are paying premiums. In this instance, transparency becomes even more critical, not only for compliance purposes, but also to build trust and allow customers to pay via their preferred payment method.

Insurers should seek to incorporate innovations such as Open Banking, alternative payment methods and mobile wallets. Adopting multiple payment methods helps ensure an easy, customer-friendly experience that aligns with disbursements.

Time to take action

The insurance industry is on the path to digitalization. Touchless claims could play a huge part in this process, and we expect payments technology to be central to the shift.

Is your firm on the path to digitalization? It could be worth putting the building blocks in place and doing so now. Your customers could soon be rewarding you with increased loyalty and advocacy.

Speak to us today to learn more about our payment solutions for insurance providers.

Source References:

¹ IBM (2021) Four ways insurance companies are improving their customer experience [Accessed 9 December 2021] https://www.ibm.com/blogs/services/2021/05/18/four-ways-insurance-companies-are-improving-their-customer-experience/
² STX Next (2021) Insurtech in 2021: Turning Challenges into Opportunities [Accessed 9 December 2021] https://www.stxnext.com/blog/insurtech-2021-challenges-and-opportunities-stuart-kelly-zego
³ LexisNexis (2021) Future of Claims Report [Accessed 9 December 2021] https://risk.lexisnexis.com/about-us/press-room/press-release/20210428-future-of-claims-study
⁴ STX Next (2021) Forbes (2021) Why Insurtech Startups Will Only Get Stronger After The Pandemic. [Accessed 9 December 2021]https://www.forbes.com/sites/forbesfinancecouncil/2021/02/08/why-insurtech-startups-will-only-get-stronger-after-the-pandemic/?sh=4a953b1667da
⁵ Capgemini (2020) WorldInsurTech Report: The Future of Claims [Accessed 9 December 2021] https://www.ibm.com/blogs/services/2021/05/18/four-ways-insurance-companies-are-improving-their-customer-experience/
⁶ Risk & Insurance (2020) Touchless claims show promise, but is it enough to save commercial auto? [Accessed 9 December 2021]https://www.stxnext.com/blog/insurtech-2021-challenges-and-opportunities-stuart-kelly-zego
⁷Worldpay (2020) Fastaccess. [Accessed 9 December 2021] https://offers.worldpayglobal.com/rs/850-JOA-856/images/FastAccess-brochure.pdf