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The machinery of insurance is made up of multiple moving parts – insurers, hospitals, brokers, agents, web aggregators, and other third parties. Payment flows are multiple – premium collections, policy renewals, commission settlements, agent incentives, claim settlements, policy refunds – and are often complex to execute.
After working with many leading insurance businesses we have come with a primer on 10 ways payments can be used in the insurance industry to grow business and improve customer experience.
1) Know ‘more’ about your customer
Every Insurer has an onboarding process wherein certain KYCs is collected from the customers. But, what if Insurers could take an additional step to also validate the customer’s bank account details (bank account validation).
This information would help in managing various cases efficiently such as instant refunds, claim settlements, etc.
Through Cashfree’s Bank Account Verification, insurers can now know if a bank account number is correct, and the name of the account holder at the bank, instantly.
2) Enable relevant payment modes
There isn’t any restriction on the type of payment modes that can be enabled. But, it’s vital to make sure the appropriate payment modes are enabled.
Example: If the policy amount is high, and wallet options are enabled–the balance won’t be sufficient to make the payment. Hence, transactions will fail and will lead to poor customer experience.
With Cashfree’s Payment Gateway, insurers can now choose from over 100+ payment modes.
3) A win-win situation with Subscription
Subscription payment modes create a win-win situation for both the insurer and the customer. Insurers will have better control over renewal and customers can renew without intervention. Therefore, it is ideal to register customers for standing instruction on cards or e-Mandate on every touch point.
Some important touch points being: Policy purchase, Policy issuance and Policy renewal.
Now, you can manage your recurring payment through Cashfree Subscriptions, and automate your billing process with Standing Instructions on Cards and through e-Mandate.
4) Using payment reminders for policy renewals
Reminder messages and emails can be more payment centric. Instead of simple reminders about policy renewal, insurers should be able to insert payment links into their messaging and convert the reminder to a payment.
Through Cashfree’s link-based Payment Gateway solution, you can remind your customers about the premium amount due through SMS, email or WhatsApp. And, collect the payment on the same channel.
5) Equip agents to collect premiums digitally
All insurers have agents (full time and part-time), that contribute large volumes in terms of new policy issuance and renewals. Typically, agents collect cheques from customers which are then deposited at an insurer’s branch–this delays issuance of policies to customers.
Instead, equipping agents with UPI QR codes or providing them with the ability to generate payment links (through mobile apps), will make policy issuance much faster.
Cashfree’s Payment Gateway lets you generate Static and Dynamic QR code, this would enable customers to pay agents through their UPI apps. Also, its UPI links solution would allow agents to share payments links through WhatsApp towards insurance payment.
6) Faster Settlements of premium collections
Policies are issued only when settlements are received in the account. Considering this dependency, insurers should be able to receive faster settlements. This results in a faster turnaround time in policy issuance.
If you’re looking for a solution that provides instant settlements, Cashfree’s Payment Gateway does just that.
7) Faster refunds on policy cancellation
Refunds will need to be initiated when: a customer cancels a policy during initial periods, or cancellation by the insurer when the customer does not meet the policy criteria.
In such cases, it usually takes 4-7 days to receive the refund. These refunds turn more complex if the initial payment was done by cheque. Utilizing an instant refund solution will dramatically mitigate these problems.
For online payment: Instant settlement (Visa Direct, MasterCard Money Send, UPI) will result in faster refunds to the source instrument.
For cheque payment: NEFT or IMPS will transfer the amount to the customer’s account, instantly.
We now have effective solutions to help you with refunds –
- Cashfree’s Instant Refunds Instantly refunds to cards, UPI and bank accounts as part of our integrated Payment Gateway Solution
- You could also use Cashgram, a link based instant payout solution where the beneficiary can select a payment instrument of choice.
8) Faster, automated claim Settlements
Claim settlement is crucial–claims are the main reason a customer has purchased the policy. Customers will be waiting on these funds, and the situation will be time-critical.
In such cases, utilizing IMPS or NEFT based solutions to disburse the funds to the customer would greatly improve the customer experience. Also, instead of relying on a single bank for such payouts, insurers would benefit from using service providers who can provide bank agnostics payout solutions.
You can now instantly disburse claim settlements using Cashfree’s Payouts. And, It’s built of bank agnostic platform with NEFT, IMPS, UPI and wallet rails.
9) Incentivize the agents
For insurers where agents are the main sales channel, it is of utmost importance to disburse the incentives on time. IMPS, NEFT, UPI and wallet based payout solutions can enable insurers to disburse faster and accurately.
Hence, Cashfree’s Payouts will also support instant incentives/commission payouts towards agents.
10) Split Payments
An insurer may sell different types of policies (e.g. car insurance, bike insurance, property insurance). It would be beneficial to have unique, multi-account settlements for each insurance type since it becomes easy to reconcile.
With a solution like Marketplace Settlements, you can create multiple settlement accounts. It lets you create virtual accounts and virtual UPI IDs. And, Every virtual account can be mapped to its own settlement account.
Cashfree’s Insurance Suite
Cashfree’s Insurance Suite is a comprehensive payment platform that helps insurers, web aggregators and related businesses not only manage collections but also speed up claim settlements while enhancing overall funds management efficiency and user experience.
And, as you can see from the above points, Cashfree’s Insurance Suite supports the entire life cycle of an insurance policy.