Earlier this year, we ran a webinar – Insurance Claims: delivering in the moment of truth. Chief executive officer, Oliver Werneyer, chief product officer, Bruno Soares and chief technical officer, David Turner, discussed how insurers can improve on delivering the promise made to customers for claims pay-outs, emphasizing the insurance claims journey doesn’t end when the claim is processed; the journey ends when the customer receives their money.
Oliver: (pictured above) When we look at the claims process itself, it’s everything from the first notice of loss, gathering the information, making a claims decision, and then, the actual payout, which, depending on the line of business, life, motor etc can be quite a different experience.
An organisation with differing product lines may offer different payment experiences, but how easy is that to implement? If we look at how long insurers’ think it will take to implement claims payment change within their organisation, to meet the differing needs of their audiences, our webinar poll shows 78% believe it will take under a year. The reality is it can take up to two years to try and integrate legacy systems without a software solution.
Bruno: (pictured above) Feedback from customers is primarily where payments fit in and why. Billing is a hot topic – monthly collections and charging – and because of the growth of digital channels, it’s important to be in the right channel at the right time, give customers multiple options and deliver a great customer experience.
David: Generally when we work with clients and they’re trying to give a great user experience, they tend to be compounded by the systems already in place. And sometimes those two elements don’t fit together.
The idea of being able to create a good user journey, a positive experience, can be hard, particularly if things go wrong such as a payment being missed, or someone not having a great checkout. Organisations can struggle to cater for the negative pathways encountered on user journeys, especially if there are numerous payment technologies they’re trying to work with.
And that’s one of the big pain points. With insurance companies for example, clients focus on the customer experience, but ultimately what does that mean for organisations from an operational perspective – how are they going to deliver that experience?
Oliver: Choosing a vendor and a payment tech to deliver a specific kind of customer experience is one thing, but actually getting it to your client as an insurer is another challenge. To illustrate this, let’s look at a basic claim and payout scenario.
Say David and myself came to Zurich for a work visit and then we return to London. We fly to Heathrow and have work to do. David lives in London. I live in Zurich. When we land, we’re told our luggage is lost. Now in this moment, David and I have the same travel insurance.
From the company perspective, we’ve been on the same flight, paid with the same corporate credit card, travelled to and from the same airports, and we’re standing at the exact same place. From our profile, and the insurer’s customer cohort perspective, we’re the same person.
Yet when it comes to making a claim, while we’ve been on the same journey and inputted the same details as to what happened, our claims payout expectations are fundamentally different. London-based David has a home to go to, he can access his clothes, a toothbrush etc. He is looking to get his luggage back or at least have it settled in cash of some sort, but there’s no immediate rush.
That’s very different to what I’d like. I don’t live in London, I have nothing I can access so would like a more immediate, real-time payment so I can buy a toothbrush etc. It’s that very last part of the payment process that’s important. While everything in a claim may look identical, it’s the ability to deliver a bespoke customer journey at payout that sets insurers apart, and this technically can be difficult to deliver.
Although insurers understand flexibility is needed and may provide payment options, getting it from one system to the end consumer is another issue.
David: It’s also based on locality and where you want to receive funds. Receiving funds in the UK via faster payments could be very different to receiving a payout elsewhere, which might take three days. Payment clarity matters to the user, yet this can be overlooked. From a product perspective, how should insurers choose payment technologies and approach the payment/customer experience?
Bruno: When focusing on payments, it’s about understanding and giving customer’s a voice. This means taking out some of the predicted behaviours and usage analytics and offering options that will be more valuable to particular customers.
As illustrated by Oliver and David’s scenario; despite them being on the same customer journey, the insurer should be able to select payment options that improve their experience and happiness around the service they received.
This can be extended into parametric and other catastrophe cover, for example with hurricane or flood insurance where people instantly need money. Not necessarily to pay for house damage, but to pay for accommodation while repairs are underway. The payout option should reflect the circumstances; there’s no point paying money into a bank if the customer can’t get there or has lost their wallet and cards.
Oliver: It’s about navigating systems and presenting customers with options where payments can be easily executed. Putting this into operations however, can have massive cost implications.
David: Even if the transaction process is in place, locality is a key issue, particularly if there are Anti-Money Laundering (AML) hurdles to overcome. We both might be at the airport and I might receive my payout, but then the bank may ask for proof of residence, via a utility bill. This could block the payout.
Oliver: Generally, each country, even within the European region, has different AML standards, so when it comes to IT integration, people like to do it themselves, until they get into the nuances of what payments really involve and the amount of internal infrastructure required to be able to host the payment systems they want to work with.
Offering a choice of different payment systems can become painful very quickly, not just in terms of code, but with regulation. You may want to use Stripe in Zurich, but then find out according to Swiss law, no data can be transported to the US. It could be a complete blocker.
Projects are often held up by insurers’ internal systems (legacy and multiple lines of business), and while the knowledge is there on how to address this, it takes longer when the customer-facing part of the journey comes into the equation. This involves not only initiating the claim process and immediate payment, but looking at the journey and what information is extracted from customers.
In addition to integration, other business areas such as finance and treasury need to connect with payment vendors and market partners to ensure the they cover the required customer experience. As payment providers typically talk about volumes and ticket size, organisations need to equally have visibility on the payment status. Payment processing isn’t just about informing customers, it’s reconciling internally.
Being good in payments is not just about the one API you connect to, it’s understanding what technology is needed, what within your systems joins you to end customers and whether they deliver the required experience (we have clients who use claim systems that pay out through a Lotus Notes database).
What if a payment goes missing, what’s the technology component that connects a PayPal payment? What if a payment fails? Who looks after this? What tech supports the entire engagement?
Technology is a key enabler. Referring to the lost luggage claim, if I’m landing in London, my claim will be paid in local currency or though players/brands I know in London. If I’m travelling elsewhere, South Africa for example, my insurer may not have the same relationships so the technology will need to offer me payment via a virtual credit card so I still have cash to buy locally.
To improve the claims experience, insurers should offer payment support in multiple ways, similar to incident management. If there’s an incident preventing a customer getting on a flight, the claimant might have to buy replacement tickets, get a taxi to an hotel, book a hotel room, pay for food and return to the airport. Insurers can use payments in a smart way to create a great end-to-end experience.
Failing to provide a great claims experience can have a massive effect on a business. It can drain claims and finance resources (reliant on each other for updates), and impact internal morale with staff affected by the poor customer journey. People are keen to improve payment efficiency within their organisations and reduce their operational and capital expenditure, but cite integration, business case approval, lack of knowledge, vendor selection and lead time as barriers.
Payments excellence is about using any channel or technology to reach the right payment end points in a timely manner. New technology and providers come to this space very quickly, so it’s vital insurers have the ability to integrate or offer these new solutions and orchestrate them to meet differing scenarios and regulatory requirements.
A customer that reaches out via a mobile phone, for example, may need support and will appreciate receiving a text or email immediately linking to a virtual account that can be loaded onto a mobile and credited to a wallet for instant spend. This process links finance and claims.
The claims experience and speed of payout is dependent upon the ability of the existing systems. Larger corporate will have more legacy-based systems, so those who use bank details solely for faster payments, may want to build up systems so they’re more attuned to local requirements, such as wallet payments, vouchers etc.
Insurers are putting a lot of effort into the claims journey, so why are they not doing the same to meet customer expectations at the moment of payment?
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