Businesses rely on a variety of insurance plans, ranging from workers compensation that pays for medical care should employees get injured on the job to auto insurance protecting company vehicles. Firms that have dutifully paid their premiums each month expect their insurance coverage to be immediately available to them when crises strike, but insurers’ methods for disbursing claims payouts are not always equal to that task.
Paper-based disbursements can force corporate policyholders to endure long waits for paper checks to make their way in the mail and risk getting lost. Insurers themselves may find advantages in exploring swifter, digital methods as well, because doing so can spare them the expenses of envelopes and postage, as well as the hassle of sending employees to the office to print the checks. The February Digitizing B2B Payments Tracker® examines where traditional, paper-based claims payout methods may fall short and how digital and automated disbursements can improve insurer and policyholder experiences.
Around The B2B Payments Landscape
Digital upgrades are on the horizon for the auto insurance sector in particular, with recent research projecting that 80 percent of these plans’ payouts will be made digitally by 2025. The majority of those digital disbursements are expected to be direct deposits, and insurers are predicted to modernize other areas as well — including automating some decision-making.
Policyholders are not only likely to appreciate receiving digital disbursements but also being able to use digital methods when purchasing coverage. FinTechs are rallying around this idea, with several debuting payments platforms intended to help insurers accept customer payments via methods like ACH, eChecks and payment cards, so that the insurance companies can answer that customer demand.
Insurers are taking a serious look at modernizing operations, with a recent survey finding that 99 percent of professionals in the sector believe digitizing would make their firms more competitive. Many insurance companies are putting their money where their mouths are, too: 59 percent of survey respondents anticipate their firms would spend more on digital upgrades this year.
Find more about these and all the latest headlines in the Tracker.
Why SMB Insurance Claims Require Digital Redress
Small- and mid-sized businesses (SMBs) suffering from loss or damage to their property need to get insurance claim payouts quickly so they can fix the problems and get back in operating order. Slow claims payouts can prolong the process of being made right, however. Many SMBs do not have the budget capability to pay out of pocket for repairing or replacing high-value property, meaning that as long as they are waiting to receive insurance checks in the mail, they may be stuck operating at reduced levels. Paper check-based payouts can create considerable delays and uncertainty, explained Azuraye Wycoff, executive manager at Boston-based micro moving and storage services provider Small Haul. In the Feature story, Wycoff gives an SMB-eye view of the problem and explains why digital payout options could be a gamechanger.
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Deep Dive: How Modernizing B2B Insurance Payouts Can Satisfy Clients And Budgets
The past year has introduced new hurdles to the business-to-business (B2B) insurance space. Insurance providers are bringing in less revenue as the pandemic, natural disasters and other challenges prompt their customers to file higher numbers of valid claims for which the insurers must pay out. This shift could prompt insurers to reexamine their processes and explore how initiatives like digitizing payments could make processes more budget friendly. The Deep Dive explores the financial incentives that could lead insurers to consider more digital claim payouts, as well as how this shift may improve client experiences by providing them with faster compensation.
Read the Deep Dive in the Tracker.
About The Tracker
The PYMNTS Digitizing B2B Payments Tracker®: Taking The Paper Check Digital, a partnership with Deluxe, examines how digitizing insurance claims payouts could better support business policyholders.