Paysure and Nium: The Insurance Industry is Based on Trust

“Insurance just needs to function simply and seamlessly,” says Snehith Peddiraju, co-founder of London-based insurtech Paysure.

That idea, however, is one that Peddiraju and his co-founder Anthony Osborn, both insurance industry veterans, know is easier said than done. A 2023 survey from consumer watchdog Which? found that just a fifth (21%) of UK consumers trust insurers to act in their best interest.

“Insurance is an industry that depends heavily on trust,” says Peddiraju. “When you’re buying insurance, you’re buying a promise. Nothing more than a piece of paper that says ‘I'll be there to support you at your time of need.’ And as much as insurers would like to be, more often than not, they aren't – instead being reactive, with post-event intervention.” 

The situation is exacerbated by the sheer inefficiency of making a claim. “Take travel or health insurance,” says Osborn. “If you're ill or you're injured, you need quick service.” But too often, policyholders need to front the bill and then hope that it’s approved further down the line – terms are typically long and complex.

It’s this problem that Paysure is working to solve. Whilst many insurtechs have focused on the simpler task of making it easier to purchase and view your policy online, Paysure, with Nium's support, is fixing arguably the most important part of the process: the claim itself. 

“We’ve effectively built a system that enables insurers to offer real-time claims whilst respecting claims rules,” explains Osborn. In practice, that means an insurer can use Paysure’s technology via API or on a standalone white-labelled basis without integration. With either approach, policyholders can make friction-free claims that are instantly checked against the insurer’s parameters and paid via a virtual card. 

“The insurance sector represents some of the largest opportunities for future disruption” says Andrew Meere, Commercial Director at Nium, the global real-time payments platform. “Innovative virtual card payments, issued locally on a global scale, present a real game-changer for this industry, disrupting the way claims are paid for the benefit of the entire ecosystem,” he adds.

Fraudulent attempts are spotted in real-time too. “Paysure checks claims history, eligibility and benefit consumption of the specific beneficiary, and ensures that the customer is actually where they say they are and is making the payment. This is all controlled in real-time and down to the merchant. Furthermore, payments are made directly to the insurer’s provider or supplier, meaning that claims exaggeration is reduced significantly, and receipt fraud is eliminated,” Osborn adds. 

Peddiraju and Osborn met at insurance giant AXA where they saw first-hand the problems  Paysure is trying to solve and, despite what some might think, how frustrating insurers themselves find those problems.

“People often have this perception that insurers are kind of out to get them, bury them in small print, screw them out of money,” says Peddiraju. “It's really not the case. Having worked inside the industry, generally they want to help people and pay people money, but they are too hamstrung by their own processes. Insurers are currently making assessments at almost every touchpoint in the process, which could be as many as five times for a single claim.”

Combined with regulatory and fiscal compliance requirements, a patchwork quilt of different providers, vast networks of third-party administrators, multiple routes of claiming, and customer uncertainty around what is and isn’t covered, insurance has historically come hand in hand with long, manual, and complicated processes.

“It’s an archaic solution in modern times. We're not saying that 20 or 30 years ago, that it wasn't the right process. What we're saying is, the process hasn't moved on when technology and consumer expectations have,” Osborn says. 

“The introduction of instant claims — i.e. the ability for a policyholder to make a friction-free claim and have it both instantly approved and paid — has the potential to not just drastically improve the policyholder experience, but transform the perception of the entire industry’, adds Meere.

Nium and Paysure’s latest launch is with a major global health insurer. Using their new virtual card, members are able to pay for eligible treatment, such as GP appointments or physiotherapy, without using their own funds, submitting a claim or requiring pre-authorisation of their treatment before they pay.

So why has it been so hard for insurance to innovate before now? “Payments businesses have tried and failed to solve this in the past,” says Osborn.  “Take prepaid insurance cards. They’ve been around for a long time, but simply replace other payment methods like bank transfers or cheques, with little to no control of how disbursed funds are spent. The claims process remains reactive; claims issues and fraud still remain.”

The next stage, both founders agree, is insurance without reimbursement. “The future is, without question, eliminating the concept of reimbursement as a first step,” says Osborn. “If something happens, technology will prove that your luggage is lost or you're ill, and then no money will change hands between you and anyone else, it will be the insurer that pays directly.” 

But in a world where insurance claims can still take months to be settled with large administrative expenses, Paysure and Nium remain focused on fixing the fundamentals and helping insurers to rebuild trust. As Peddiraju puts it: “Really, this is about enabling insurers to take back control, so they can foster deeper relationships and more meaningful engagement with their customers. So that insurance doesn’t just function, but functions simply and seamlessly.”

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