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Insights and Expertise
ChapterTitle

Transforming insurance payments with

innovation, speed, better CX

to be the case. For example, parametric insurance is
transforming claims processing by automating payments
based on predetermined conditions, eliminating the need
for customers to file a claim (see https://bit.ly/4izRDXR).

Unlike traditional insurance, where claims are initiated by
the policyholder, parametric insurance relies on external
data triggers. For example, a travel insurance policy
could automatically issue a payout if a customer’s flight is
delayed beyond a set time.

Modernizing insurance payments: key take-
By Paul Clarke aways
Cashflows Outdated claims and payment processes
frustrate customers, but new technology
or policyholders, one of the most frustrating is transforming the industry. Here’s how
aspects of insurance is the claims process. While insurers can improve efficiency and customer
awaiting reimbursement, customers often face satisfaction:
F lengthy waits—from several days to several
months or longer, depending on the type of claim—exten- • Faster claims processing: Legacy sys-
sive paperwork, and out-of-pocket expenses (see https:// tems cause delays. Digital solutions like
bit.ly/3ETZkJH). parametric insurance automate payouts
based on real-time data, eliminating pa-
This creates added stress, especially in urgent situations perwork and wait times.
when they need funds quickly for essential repairs,
replacements or medical bills. • Reducing payment failures: Tools like
account updater services and smart retry
Insurers may say that this is unavoidable, but customers technology help prevent lapses due to ex-
aren’t likely to accept this as an answer during high- pired cards or insufficient funds.
stress situations. Delayed payments create bad blood • Seamless mid-term adjustments: Net-
between customers and insurers that will inevitably lead
to a percentage of customers going to different insurance work tokenization simplifies policy up-
dates, reducing administrative costs and
providers, even if they have essentially the same policies.
ensuring continued coverage.
These delays are often rooted in insurers’ legacy systems, • Enhancing customer experience: Digi-
which prioritize risk and fraud prevention over speed. tal payment options (virtual cards, direct
While fraud prevention is essential, insurers need a debits, digital wallets) improve conve-
balanced approach that also prioritizes customer needs. nience and satisfaction.

Customers increasingly expect their insurers to provide • Competitive advantage: Insurers who
timely, supportive service, without unnecessary delays. embrace modern payment technology
To remain competitive, insurers must update their claims build trust, strengthen loyalty, and dif-
processing and payment systems to better serve today’s ferentiate themselves in the market.
customers.
By streamlining payments, insurers can
The role of parametric insurance provide faster, more reliable service and boost

If old technology is the problem, then it stands to reason customer retention.
that new technology will be the answer, and this appears

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