Studies show over 5,900 insurance companies exist in the U.S. Moreover, nearly 415,446 Insurance Brokers & Agencies businesses these companies support these companies. Saying the insurance industry is enormous would prove quite an understatement. 2.9% of the national GDP is powered directly by these insurance companies. These numbers rank staggeringly high. However, only a few selected companies control the fate of the entire industry.
The top insurance companies that control the sector have two things going for them:
- Time: They have been around for several decades
- Loyalty: They are trusted by their customers
However, existing less than two decades in business, new players actively strive to disrupt the industry with value-added technologies. Constant innovation helps these smaller, newer companies with limited resources compete with these mammoths. They are incredibly agile and quick in adopting customer-facing technologies that offer revolutionary convenience.
The large insurance companies may not be as agile as these new players, but they are not handicapped either. In fact, most of these new and old insurers are actively relying on fintech providers to compete for the market share. They are partnering with reliable payment processors and data analysis firms to adopt technologies instantly without spending years developing them from scratch.
This blog discusses how insurance companies use digital payment technologies to automate their premium collection processes and offer an excellent customer experience.
- Why Use Digital Payments for Insurance Premium Collections?
- Technologies Used for Seamless Insurance Payments
- Hosted Payment Portals
- Recurring Payments
- SMS Payments
- Email Invoicing
- IVR Payments
- Virtual Terminals
- Additional Must-Have Technologies for Insurance Companies
- Multiple Methods of Payments
- Check Verification
- Account Validation
- Cash Discount Program
- Other Benefits of Collecting Insurance Bills Digitally
- How to Get Started with Digital Insurance Premium Collections?
- iCG’s Innovative Payments for Insurance Companies
Why Use Digital Payments for Insurance Premium Collections?
Low-Cost Payment Processing
Giant insurance aggregators actively increased insurance prices this past year. Geico and State Farm considerably increased their auto insurance rates from June 2022. But that’s not all. Health, home, and life insurance providers will also significantly increase premiums. Given that the insurance rates are already rising, insurers and large aggregators can provide some relief in the overall costs by offering low-cost payment processing.
Using low-cost payment methods like ACH helps these organizations attract more customers by reducing the overall cost of premiums.
Enhanced Customer Experience
Organizations that offer multiple payment options can target a larger audience. Studies by McKinsey show that 82% of Americans now use digital payments actively. Gen-Z and Millennial candidates make the most of today’s active insurance-buying population. Insurance companies that want to attract the evergrowing younger audience must adopt digital payment technologies to stay relevant.
Digital payment solutions like SMS payments, mobile wallets, and contactless payments have gained even more popularity since COVID. Adopting self-serving digital payment platforms enhances customer experience, improving the organization’s overall Net Promoter Score (NPS).
Improved Renewal Rates with Automated Payments
Selling a long-term insurance plan is one of the best ways for the insurance company to retain customers. The second best way is to adopt automated payments. Automated payment solutions help customers pay their insurance premiums regularly without lifting a finger. The insurers that offer costlier premium packages adopt this technology to provide unparalleled convenience to their customers.
Insurers offering automated payment systems will earn higher customer retention if they provide technology and do not raise their prices significantly. Also, recurring payment cycles eliminate the need to pay manually, ensuring that the customer does not search for a better deal on a competitor’s website. This solution reduces customer churn rates.
Unlike checks that take several days, sometimes weeks, to process, digital payments are almost instantaneous. Credit card payments take just a few seconds, and eChecks via ACH take just 2-3 days. Nacha is focusing heavily on same-day ACH payments to increase the availability of fast and low-cost payment processing. Digital payments help large insurers keep an active cash flow by ensuring immediate availability of funds.
Secure and Reliable Premium Collection
Modern digital payments are not only fast but incredibly secure. Next-gen insurers leverage critical technologies to detect and prevent fraud while adopting faster payment systems. They use digital payments with encryption and tokenization technologies to enhance security for themselves and their customers.
Most large insurers partner with reliable payment processors following the latest Nacha and PCI compliance regulations to safeguard customer data. These payment processors uphold the newest payment processing norms for various technologies to mask customer data and reduce the compliance burdens at the insurer’s end.
Technologies Used for Seamless Insurance Payments
Hosted Payment Portals
Hosted payment portals generate website-based payment solutions that help insurance companies accept payments over the internet. They integrate with the insurer’s existing website, if any, or create a different online web page to collect payments. Companies that do not have a website can use a generated URL to add to their Google Business page, social media company page, or even as a QR code to get paid by their customers.
Modern payment processors develop hosted payment portals for large insurance companies and integrate them directly on the insurance company’s website. Tech-savvy payment gateway providers offer customized hosted payment portals that mimic the insurance company’s website. These portals feel and look like an integral part of the core website, helping the customer feel more confident while making payments.
Well-designed payment portals ensure PCI and Nacha compliance to mask and protect customers’ sensitive banking information. The payment processor also takes care of the hosting fees and guarantees a near-perfect uptime to ensure that the business does not take a hit due to maintenance issues.
- Self-Service for Faster Query Resolution
These portals help end customers pay their dues independently without dedicated billing assistance. The most intuitively designed portals are easy to use and accept payments with just a few clicks. Most customers don’t need additional training to access and pay their insurance premiums on a well-designed portal. The self-service payment capabilities eliminate the need for a large team of live agents to accept customers’ premium payments.
Recurring payment technologies remain prevalent in the insurance and healthcare industry. These technologies help businesses automatically debit a correct preset amount from the customer’s bank accounts.
They help customers pay bills on a recurring fixed schedule without manual intervention.
- Automated Payments
Well-designed recurring payment solutions have provisions for setting custom schedules. Insurance companies use these solutions to set a fixed monthly, bimonthly, biannual, or annual premium collection automation. These solutions allow them to collect insurance premium amounts from their customers automatically without requiring explicit authorization every time. Customers that fail to pay their bills on time risk losing their insurance coverage or additional discounts. These customers often use automatic payments with ACH-based recurring billing solutions to ensure their premiums are paid on time.
- Learn how customers can use recurring payments to automatically pay the insurance and scheduled utility bills.
SMS payments, aka text invoicing solutions, help large insurance companies stay in touch with thousands, sometimes millions, of customers for their payment needs.
Bill collection via SMS payments works in two ways. Insurance companies can either use back-and-forth SMS prompts or secure payment links to collect these bills. A PCI-complaint online portal always protects all transactions via advanced SMS payment solutions.
SMS payments work with the hosted payment portal technology to accept payments securely. Insurance companies use the second method to send a payment link to their customers via SMS. The customers then use this link to log in to the payment portal and complete their transactions using ACH or credit/debit cards. SMS payments help customers pay directly from their smartphones while on the move. They can complete an online payment on these portals as long as they remember their card and bank details for the transaction.
- Reminders for Upcoming Payments and Renewals
Corporate insurance companies use SMS texts to send payment reminders, direct payment links, and the amount due details to their entire customer base with just a single click. They can also use SMS texts to inform their customers about upcoming renewals, past-due payments, and receipt of payments.
Email invoicing solutions help insurance companies generate and distribute a large number of invoices every day.
- Handle Thousands of Customers with a Single Click
The best email invoicing solutions have customizable email invoice templates. Insurance companies use these templates to generate invoices for thousands of customers with a single click. They also distribute these invoices to the right customers over emails automatically. Such email invoices typically include the following details:
- New amount due
- Past-due payments
- Taxes and additional cost details
- Total amount due
- Payment date
- The insurance company logo and branding
- Customer support contact details
- Relationship manager contact details
Interactive Voice Response, aka IVR payment technologies, have gained massive popularity during COVID. These technologies are exceptionally well-received amongst the elderly with trouble accessing the internet for payments. IVR systems help enterprise insurance companies accept payments on the phone securely, without the need for large dedicated call centers.
The core benefit of a modern IVR technology setup is that it eliminates the need for a big team of live agents or contact centers. Initially used only for call routing purposes, these solutions have evolved into much more sophisticated technologies. Modern IVR solutions have speech recognition and customizable workflows with menu options to:
- Answer FAQs
- Handle customer grievances
- Escalate emergency cases to dedicated live agent customer support teams
- Offer premium preferred bill collection and customer service to the most valuable audience
- Discover premium collection tech for insurance carriers briefly.
Additional Must-Have Technologies for Insurance Companies
Multiple Methods of Payments
The flexibility and choice to pay using multiple payment methods help insurance companies attract a more extensive customer base. Ideally, insurers should offer the following payment methods:
- Debit Card
- Credit Card
Additionally, they must adopt a few, if not all, of the above-mentioned payment solutions to accept online payments from customers. While the use of paper checks and cash payments has reduced significantly, it is not entirely eradicated yet. So, insurers should also accept these payment methods for the more traditional customers unfamiliar with online payments.
Check verification technologies help large companies accept customer check payments without risking fraudulent behavior. Modern check verification systems verify several details on the check to ensure its validity, and they identify fraudulent checks in real-time to prevent fraud. Here are the five most important components of an advanced check verification system.
Account validation technologies go hand in hand with check verification systems. These systems ensure the correct ownership of the account before processing payments. Top payment processors use real-time account validation checks and an active negative data database. Here’s how large banks and insurance companies digitize their payments using account validation and other recent developments in the payments industry to minimize fraud.
Cash Discount Program
Insurers that accept ACH or eCheck payments help their customers save money on processing fees with cash discount programs. Our previous blogs covered the benefits of a cash discount program extensively:
- 10 FAQs on Cash Discount Programs
- Cash Discount vs. Surcharge Programs
- 5 Things Merchants Need to Know About Offering a Cash Discount Program
Customized cash discount programs eliminate most card processing fees and reduce the overall cost of premium payments. Such programs help the customers access insurance policies at a lower price and help the insurance company save millions of dollars while processing payments for thousands of customers.
Eliminating paper-based accounting and reconciliation is the first step towards true digitization for most enterprise organizations. Virtual terminal solutions help these organizations create a digital trail of all their payment and collection processes. However, the most intuitive terminals do much more:
- Quick Integration and Fast Deployment: They quickly integrate multiple back-end accounting tools with the payment processing units. Their plug-and-play nature helps deployment within days or weeks instead of months.
- Comprehensive Dashboards and Tracking: They have inbuilt reporting features that help the insurer create multiple extensive dashboards for payment tracking. With a single click, these customizable dashboards help them get information on pending, past-due, and upcoming payments.
- Digital Reconciliation: They support single-click digital reconciliation to manage thousands of payments and collections daily.
Other Benefits of Collecting Insurance Bills Digitally
The need for contactless payments increased multifold since COVID. Digital online and contactless technologies help customers pay their insurance bills on time without exposing them to harmful viruses.
Integration with Core Systems
Partnering with a top-tier tech-savvy payment processor helps the insurer access all the above-mentioned technologies on a single platform. Such reliable processors integrate these modern solutions with their core systems to enhance functionality while reducing the need for additional human resources. Partnering with a one-stop payment processor for all technological needs helps with seamless integration that ensures data flow between different systems without any leakage or risk of exposure.
Reduce Administration Costs
Digital technologies also reduce postage fees and administration costs by automating several functions. They eliminate the need for large accounting teams by creating comprehensive dashboards and offering single-click reconciliation options. Self-serve hosted payment portals help customers pay their insurance bills from the comfort of their homes, thereby reducing footfall at the insurance office.
How to Get Started with Digital Insurance Premium Collections?
This 5-step mini guide helps insurance companies get started with digital payments.
1. Evaluate Existing Technologies
Before evaluating new technologies, the insurance company’s IT team should explore the functionalities of their existing system to their full potential. They should choose solutions based on functionality rather than costs or fancy bells and whistles. Usually, simpler intuitive payment solutions prove much more effective than hyped AI and ML-based modern solutions.
2. Explore Modern Core Payment Technologies
After doing a thorough analysis of their current systems, they should make a list of additional functionalities they can leverage to reach ROI as soon as possible. Taking a functionality-driven approach instead of a vendor-driven approach helps them identify the right partners for technology adoption.
3. Partner with a Reliable Payments Processor
Identifying core functional requirements will help them effectively compare the thousands of vendors in the market. When choosing a suitable payments processor, they should focus on:
- A one-stop solution provider that offers them the proper support and technologies
- Reliability for an excellent uptime
- Comprehensive support for training and seamless adoption
- Excellent security and compliance with the correct payment norms
- Scalability with innovative additional technologies when needed
4. Conduct Customer Surveys
Adopting technologies and going live with them is just the first step. Insurers must constantly innovate and listen to their customers' requirements regularly to reach ROI as soon as possible. Conducting customer surveys helps the insurer understand technology adoption at the grass-root levels. Also, surveys are effective in identifying the scope for additional technology adoption.
5. Scale with Additional Technologies
Companies that do not innovate and offer subpar customer services cannot grow sustainably in the current competitive markets. Staying relevant with the latest digital payment technologies is the only for them to gain a competitive advantage. As their customer base grows, they must develop their business and technology stack with relevant tools.
iCG’s Innovative Payments for Insurance Companies
Modern insurance companies realize they need not spend millions of dollars and several years anymore to stay competitive. Instead of hiring in-house application and software developers to generate payment technologies from scratch, they partner with a reliable payment processor like iCheckGateway.com at a fraction of the cost. Our practical and innovative suite of payment solutions includes:
- ACH Processing
- Credit Card Processing
- Cash Discount Program
- Hosted Payment Portals
- IVR Payments
- SMS Payments
- Mobile Payments
- Recurring Payments
- Virtual Terminals
- Email Invoicing
- Check Verification
- Accounting Software Plug-Ins
- And more
We help enterprise insurance companies with the most modern and secure payment gateway solutions to help them process payments seamlessly. Get in touch with our team today to help your insurance company customers get the most out of their payment processes.