The Time for Digital Claim Payments is NOW

The pandemic has shown a spotlight on the drawbacks of paper checks and manual processes. Insurers now see where they need to quickly gain digital ground during this uncertain time.

Where a Crisis Shines a Light: The Push to Digital

With the advent of COVID-19, insurers were forced to quickly figure out how to perform work remotely – provide quotes, collect premium, issue policies, settle claims and disburse payments. And although the industry has demonstrated great adaptability to the momentous disruption, not all carriers have enjoyed a smooth experience. An intense spotlight has been shown on manual methods, particularly things that require in-person handling such as regular mail and paper-based processes, including check cutting and distribution. Carriers have realized where they need to quickly gain digital ground.

A Digital Paradigm Shift

The drawbacks of paper checks became readily apparent to most Americans when they realized it could take weeks to possibly months for them to receive paper stimulus checks from the federal government, while those who had direct deposit would receive desperately needed funds in days. When banks quickly closed lobbies and reduced hours, restaurants switched to online orders only, and contactless grocery delivery experienced a huge surge in popularity, the mainstream population rapidly converted to a digital mindset. As with any type of behavioral change, there are fast adopters and slow stragglers, but crises have a way of pushing the envelope and putting things into perspective. In a matter of only weeks, the COVID-19 pandemic greatly increased the adoption of digital payment methods among all generations.

The Digital Insurance Transformation Landscape

So where does this digital paradigm shift and spotlight on digital gaps leave property and casualty insurers? Driven by changing customer expectations, emerging technologies, and new industry competitors, most carriers had already embarked on their digital transformation journeys, although not all have been traveling at the same speed.
A recent SMA Research Report entitled ‘2020 Strategic Initiatives: P&C Personal Lines’ paints a picture of the digital transformation landscape pre-COVID 191:

  • 100% of personal lines insurers had initiatives focused on digital transformation with 50% having broad deployment, 31% in initial implementation stages, and 19% only just developing their strategies.1
  • 65% of personal lines insurers stated that customer expectations and innovation were the top drivers of their digital transformation initiatives.1
  • 35% of personal lines insurers stated they were just surviving or sustaining with little to no growth.1

While many personal lines insurers had already integrated digital claim payment transformation into their strategic roadmap, others had chosen to wait for a more opportune time. But with COVID-19, it has become clear that the opportune time has passed. The pandemic has caused such systemic and swift change globally that it has served as a huge digital wake-up call. Today, carriers have an increased focus on business continuity, employee safety, customer experience and cost savings. Per a newly released SMA market pulse report, a total of 81% of personal lines carriers are now focused on outbound payment digitization, with 14% actually accelerating their plans.2

Digital Claim Payments: Providing a Superior Customer Experience in Any Situation

This pandemic will not last forever, but the changes in consumer behavior toward digital demand will persist and grow. Future-focused carriers who had already invested in a robust digital claim payments platform have not only enjoyed business continuity, they have also been able to provide superior service to their customers, vendors and other third parties. They have been able to deliver on their brand promise. On the other side, insurers who have not yet made this investment have been working extremely hard just to get claim payments out the door. NOW is definitely the time for carriers to switch to a digital claim payments platform that allows for instant money transfer, real-time reconciliation, and an uninterrupted customer experience.

 

 

 

1 ‘2020 Strategic Initiatives: P&C Personal Lines’ – https://strategymeetsaction.com/our-research/2020-strategic-initiatives-p-and-c-personal-lines/

2 ‘P&C Tech Plans in the COVID-19 Era: SMA Market Pulse Insights’ – https://strategymeetsaction.com/our-research/p-and-c-tech-plans-in-the-covid-19-era-sma-market-pulse-insights/

2020-06-30T22:00:57+00:00

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