We got caught snoozing by COVID with a paper check dependence that remains problematic, despite there being all manner of digital alternatives. Happily, we’ve learned from all this.
PYMNTS February 2021 Digitizing B2B Payments Tracker® done in collaboration with Deluxe, takes deep dives into the insurance sector, among other highlights, examining advancements that digital payouts offer at a time when companies must keep down costs in any way possible.
Tom Reuter, director of digital payment solutions at Deluxe, told PYMNTS, “Digitizing and sending claim payouts and the explanation of benefits in a single electronic transaction streamlines and speeds the delivery. This eliminates [the] costs of printing and sending payouts, decreases call center questions around locating the payment and reduces opportunities [for] fraud by physically intercepting the payment.”
As the bottom line gets additional scrutiny throughout this year and next, money-saving and error-reducing digital enhancements like that are gaining ground while coexisting with paper checks in what looks to be a transitional arrangement that’s important to master now.
Underwriting On The Digital Trust System
Industries like insurance are among the first benefitting from digitization efforts designed to wean enterprises with complex legal responsibilities off their paper habit.
“Digital upgrades are top-of-mind for many insurers looking to keep pace with their peers. A recent poll of insurance professionals found that 99 percent believed digitizing would help their firms compete,” per the Digitizing B2B Payments Tracker®, “with 59 percent of [insurance] respondents saying they expected … to spend more on digital transformations this year.”
As businesses adopt solutions that automate AR processes like payment reassociation and invoice matching, “The chief factors revolve around ease of use, speed of payment and security,” Reuter said. “This will be achieved by carriers delivering self-service models that offer policyholders and businesses [payment] choices … that are trusted and secure.”
Expect to see more of this activity — much more, in fact. The new Tracker quotes Bill Brower, vice president of auto claims at data analytics and decision tools provider LexisNexis Risk Solutions, noting that “many auto insurance claim payouts are currently made via paper checks, but LexisNexis’ research has predicted that more than 80 percent of them will be delivered digitally by 2025. Many of these digital transfers are expected to be made via direct deposit, thus sparing recipients from waiting days for checks to arrive in the mail.”
Costs Down, Satisfaction Up
Much of the February 2021 Digitizing B2B Payments Tracker® deals with different facets of the insurance industry and unique payments needs and uses of these specialized companies.
Payments innovations in mobile will be hyper-relevant to some, like auto, for example. As the Tracker states, “Policyholders who have been in accidents can leverage these solutions to take videos and photos of damage or to enter necessary information on the mobile platform, for example. The platforms can then pull claim filings and supplementary data — such as real-time weather reports — to gain better understandings of the events, enabling insurers to make faster and more-informed decisions. Some insurers also are looking to use tools that automate decision-making regarding the approval or rejection of claims to streamline the process.”
More broadly speaking, “Insurance firms’ operational costs are rising as they are being forced to pay out more claims while grappling with ongoing crises like climate change and the pandemic. Companies may be better equipped to handle such expenses if their payment processes are efficient, however, and this is encouraging some to consider ways to reduce or eliminate the use of resource-intensive methods like paper checks,” per the Tracker.