How Rebooting Insurance Claim Payments Goes Beyond Cards

Author: Jason Reddington, Director, Insurance, Mastercard

The Insurance Claims Payment Landscape

Todays consumer expects quick and convenient payment experiences, and insurance claim payments are no exception. In fact, policyholders may have even higher expectations for claim payments as these are often tied to unexpected events, and may involve a high degree of stress and uncertainty.

This means that insurance companies need to be responsive to customer needs and ensure that claims are paid as quickly and efficiently as possible. Offering multiple payment methods can help insurers to meet customer needs and build trust and loyalty among their policyholders.

The way claim payments are made can have a significant impact on the overall customer experience. When payments are processed quickly and efficiently, policyholders are more likely to feel satisfied with the service they receive, which can lead to positive reviews and referrals. This could ultimately lead to increased loyalty and retention, as well as positive reputation in the marketplace.

Payment Choice Matters

To ensure that claim payments are made quickly and securely, it's important for insurance companies to offer multiple payment methods. Through a variety of payment options, including digital methods like mobile payments and direct deposit, insurers can improve customer service and build stronger relationships with their policyholders.

The benefits of multiple payment methods extend beyond individual policyholders, as business-to-business (B2B) payments are also an important part of the claim payment process. By offering multiple options for B2B payments, insurers can automate and streamline the claim payment process.

Multiple payment methods can also make reconciliation easier. By providing detailed information, with the ability to track real time status of each payment, insurers improve accuracy and reduce administrative burden chasing claim and payment status. For example, virtual card innovations provide detailed information about the lifecycle of a claim and its associated payment flow, which improves accuracy and reduces the risk of errors in the reconciliation process.

Whether it's an individual policyholder or a business partner, insurers need to be able to offer payments that meet their needs and make the claim payment process as smooth and efficient as possible. By doing so, insurers ensure that payments are made accurately and on time, ultimately building trust through quick and simple claim payment experiences.

While digital payment methods like mobile payments and direct deposit could be considered as increasing costs, their benefits such as saving time, reducing errors, increasing protection, and speeding up payments far outweigh any related transaction fee.

Rebooting Insurance Claims Payments

Not all payment methods are created equal, and some may be better suited for certain types of insurance products and customers than others. For example, parametric insurance policies may have different payment requirements than traditional policies, and insurers may need to consider these differences when deciding which payment methods to offer.

In general, parametric insurance policies are designed to pay out automatically based on specific triggers, such as the occurrence of a natural disaster or other specified event. In these cases, the claims process may be more straightforward and less dependent on traditional claim handling procedures. As a result, insurers may be able to offer more streamlined payment methods, such as digital payments or direct deposit, which can help to expedite the payment process and improve customer satisfaction.

On the other hand, traditional insurance policies may require more complex claim handling procedures, and customers may have different expectations for the claim payment process. In these cases, insurers may need to offer a wider range of payment methods, to ensure that customers have a choice that suits their preferences.

What’s vital here is payment choice. Ensuring that insurers have the flexibility to meet each specific policyholder's need without holding up the process and delaying payment is critical to a payment strategy. Giving insurers the ability to respond quickly to supplier payment requests so that businesses receive prompt payment for services, while giving policyholders quick access to the funds or support they need when it matters the most is essential. This can only be achieved if insurers have multiple integrated payment options available to them which can be easily triggered to meet individual claim needs.

A Commitment to Experience

Ultimately, the decision to offer multiple payment methods in claims payments should be driven by a commitment to improving customer service and driving efficiency. By taking a strategic approach to payments and considering how they enhance operations, supporting both the policyholder and suppliers while boosting the bottom line, insurers can strike a balance between customer service and cost management. Driving competitive advantage through speed, trust and satisfaction.

Insurers who prioritize the convenience of their policyholders by offering greater payment choice stand out in a highly competitive marketplace. With the added benefits of faster and more accurate payments, streamlined reconciliation, and more efficient business-to-business payments, insurance companies have a lot to gain from investing in a variety of payment methods.

Rebooting insurance claim payments goes far beyond cards, today the innovation exists to integrate and offer a variety of payment methods to support individual claim needs. By considering the specific needs and expectations of their policyholders and the types of insurance products they offer, insurers can offer a range of payment options that are tailored to their customers' needs, ultimately improving customer satisfaction, and building strong, long-lasting relationships with their policyholders.

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Mastercard is transforming insurance payments

Mastercard has over 50 years’ expertise powering digital payments, innovating to enhance experience for consumers, large and small businesses across all sectors, governments, and financial institutions. We’ve created a dedicated insurance team, which comprises experts from the sector with experience working with and for insurers. By combining Mastercard’s digital payment innovation and suite of products and data insights, with the team’s industry knowledge and collaborative approach, we aim to work with partners across the insurance sector to address the complexities of insurance payments.

We’re passionate about transforming the insurance payment experience and providing deep insights to drive operational efficiency and increase resilience across the insurance value chain.

?Let’s connect: To connect with Mastercard’s insurance team contact [email protected] or contact Jason Reddington directly on LinkedIn.