In a way, the earliest days of eCommerce and increasingly digital payments were about how all the new technology would transform legacy industries. Now, that question has shifted – and in many ways has become about which legacy technologies have yet to change and what it will take to make those changes.
And payments – specifically cross-border payments – have a big role to play, both now and in the coming years.
Insurance is one of those legacy industries, though digital change is quickly coming, as discussed in a new PYMNTS interview between Karen Webster and Mitch Doust, executive vice president of the Americas at Cover Genius, which describes itself as a digital insurance distribution platform for eCommerce companies. The story he told Webster was one of not only taking insurance deeper into the digital world, but doing so via global operations and cross-border payments. Cover Genius’ technology “can distribute any insurance solution, provided there is a digital purchase or payment path we can integrate with at the front end,” Doust said.
Insurance, as a broad industry, is at various stages of maturity regarding eCommerce and digital tools used for its purchase and operation, including disbursements. Most consumers, for instance, are familiar with offers of insurance for online travel purchases. And with every passing year, automotive insurance becomes more digital and mobile. But other forms of insurance are still stuck in the last century. Not only that, but “retail is significantly underpenetrated from an insurance perspective,” Doust told Webster.
But there is a significant opportunity, he said, including at the point of sale – that’s where consumers might be persuaded to buy insurance for certain products, while that decision is fresh. “Delivery should be at the point of sale when consumers are thinking about the activity they are undertaking,” Doust said. Offering retail-related insurance during the purchase process also holds the potential to increase conversions, “if you can deliver the right product at the right time.”
Underwriting models for insurance delivered via the Cover Genius platform vary by product, Doust told PYMNTS, but the company has relationships with numerous insurance companies throughout the world (Cover Genius operates in over 60 countries and in all 50 U.S. states). As Doust explained, data around consumer behavior on the platform informs marketing and product selection, and can lead to customized insurance offers for consumers – because if anything, digital is an enabler of personalization, which is becoming increasingly important in the business-to-consumer relationship.
Insurance is not only a legacy industry, but is also extremely complex. Every market has its own set of regulations, and that’s not the only challenge. Payments, too, are inherently complex when it comes to cross-border transactions. So are disbursements, especially in the instant-payment environment that is building around the globe.
“It’s a very complicated problem,” Doust said – but there is at least one general path to unknotting all of those complications. It comes via payments, and the new infrastructure that is being built to better facilitate cross-border payments and disbursements, and quicker transactions overall. “These are complex relationships. We are leveraging new rails that are popping up globally,” he noted.
That’s one way to solve the cross-border payments and disbursements problem in insurance. But there are other problems, especially for a global operator with a digital bent. As Doust noted, the typical insurance payment process can take weeks. “Claims are getting approved on an individual basis by traditional insurers,” he said.
But harnessing the payment innovation that has taken place over the last five years or more, and using data to automate some claim adjudication, can result in the creation of a better, more efficient consumer experience, including instantaneous payments of claims in a variety of methods.
Slow-Moving Legacy
Indeed, innovations in payments are helping the insurance industry appeal to digital-minded consumers. The $1.1 trillion-plus insurance industry typically relies on slow-moving legacy methods like paper checks and snail-mail. Change has been slow, but insurance providers are turning more to emerging technologies to pave the way for faster, more convenient disbursements.
It will take time to get to that higher level of digital and mobile efficiency in the insurance industry. But as cross-border payments become more appealing, that tool will certainly help encourage progress.