Insurity launches 30-second claims payments solution
One of the leading US Software as a Solution (Saas) providers, Insurity, has launched a cutting-edge system for settling insurance claims in under a minute for Property & Casualty (P&C) insurers.
According to Insurity, the new cloud-based out-of-the-box, low-code solution, called Digital Claims Payments, settles claims quickly and enables P&C insurers to reduce administrative and implementation costs and provide a more seamless policyholder experience through near-instant claims payment.
Insurity has a reputation for innovation in the insurtech space and is currently servicing 15 of the top 25 P&C carriers in North America. It also has more than 200 cloud-based deployments via its digital platform. The launch of the Digital Claims Payment system looks set to increase the company’s position as a top, technical solutions provider.
Insurtech digital adoption
A recent study by the leading insurance and technology advisory and consulting service, Novarica, shows an estimated 42% of insurers are facing greater pressure to drive digital adoption while over 70% of policyholders want more options on how and when they receive their claims payments.
Traditionally, P&C insurers needed to partner with an additional vendor or go through a lengthy integration and implementation process to deliver fast claims payouts. Even then, payments could still be delayed if payment systems were not connected in real-time to the payment fulfillment centres.
The solutions offered by Insurity will help companies revolutionise their claims payment process and help customers receive a better service, thus improving user experience and client retention. The Digital Claims Payment system allows insurers to authorise and make a payment through a single click.
The SaaS tool is embedded within Insurity's software and comes ready to use. P&C insurers can quickly scale to meet claims payment needs in times of high demand, such as during natural disasters like hurricanes and floods.
The service also results in significant cost savings for carriers, claims Insurity, because it reduces labour and administration fees, as well as cheque distribution costs.
In instances where the policyholder prefers a check payment or if incorrect banking information was entered, the solution has a digital-first check fallback component. This is an automated, separate workflow that will serve as an alternate method to quickly deliver policyholder payments, further reducing check distribution costs by up to 50%.
Insurtech payment solutions
Speaking about the newly launched solution, Becky Kopplin, Vice President, Payments at Insurity, explained, “Insurity’s Digital Claims Payments allows insurers to enhance their digital capabilities without losing traditional options like check payments that some policyholders may still prefer.
“Policyholders can have money in their account within 30 seconds from when a payment is approved. They no longer need to wait days or even weeks for a third-party mailing service to deliver a check. If they want to be paid via digital wallets, they can have that option because insurers implement the solution as a whole and not as individual payment types. There is no need for an add-on or upgrade. It is one integration that is future-proofed for future digital options.”
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.