Vrush Sumanoharan, Product Marketing Expert at Edenred Payment Solutions
For consumers, insurance isn’t the most exciting of purchases to make. However, despite widespread apathy there is belief in the value of insurance. According to a report from the Association of British Insurers (The Price Of Accuracy: Consumer Attitudes To Data And Insurance) four in five (82%) customers say that they would feel vulnerable without it. While it might not be our favourite thing to buy, the importance of insurance is generally widely accepted.
While the process of buying insurance has improved with new technology, making claims still has room for improvement.
In some cases, particularly when dealing with property and medical expenses, policyholders are still asked to pay upfront for services, submit a claim, and wait for reimbursement. It’s a process that is often time-consuming and stressful as customers wait to be given the green light on their claim to be compensated.
Virtual cards offer a game-changing alternative. They have the capacity to give people the chance to access funds instantly at the point of service, whether at a doctor’s office, local garage, or vet practice.
How virtual cards work and what they can offer customers:
A virtual card is generated electronically and has a unique card number, expiry date and security code (CVV) for each transaction. The card can help to provide more control over payments as limits can be set and configured for use with specific merchant types. The insurance firm will fund the virtual cards with the amount as defined in the claim and card details are shared with Policyholders.
Virtual cards are integrated into the insurer’s ecosystem, and offer the convenience of instant fund transfers to policyholders through this virtual payment card. The card can be designed to integrate with mobile wallets like Google Pay and Apple Pay, and it’s here that allows policyholders to directly pay for their claims or healthcare expenses without the need to upfront the funds.
How does it benefit insurers:
These payment cards, which receive compensation payments, provide insurers with valuable transaction tracking, meaning they can gain insights into their claims process. It removes any difficulty an insurance provider might have with retrospectively tracing payments using receipts and finalising reconciliation. A smoother process for the customer then becomes a smoother process for the insurer.
For those who integrate the virtual cards, they’re also able to learn more about what their customers are being charged for, what services they’re most likely to need, and when the volume of these claims might increase. These insights would allow insurers to make better decisions on risk, streamline their internal operations and reduce processing costs by removing the need for bank transfers, and prevent fraudulent claims more accurately.
What does it mean for the industry:
In an environment where customers generally don’t always get the best experience, this technology could reshape customer expectations completely.
In fact, recent research from consumer group Which? flagged that insurers’ were consistently failing to explain to claimants what they could expect and how long the process would take. The research also highlighted inefficiencies in how evidence is collected to validate claims.
By creating a smoother and faster way to disburse funds from an insurance company, insurers can differentiate themselves from others and create a genuinely valuable USP in a competitive market. In addition, this process directly benefits them in terms of a clearer process, better access to data, and reducing fraud risks.
By simplifying and expediting the insurance claims process, offering a more seamless and customer-friendly experience, the insurance industry could significantly improve its service delivery and customer satisfaction.
