Posted by Bethany Frank on 04 Jan 2017
Payments tend to be particularly challenging for insurance companies. Due to the nature of the business, it often makes sense for insurers to outsource payments entirely. A payments partner can help insurance companies provide a first-class payments experience to their customers without the worries of backend operations and compliance issues.
Lack of Experience amid Increasing Demand
In the past, payments made to insurance companies often came from employers and other institutions rather than directly from consumers. Recent changes under the Affordable Care Act, however, have led to substantial increases in direct consumer payments to insurance companies. Many insurers are finding themselves unprepared to meet the increased demand. They lack the necessary technology infrastructure to provide a customer experience that is suitable to today’s standards.
This often leaves consumers frustrated and dissatisfied with their insurance providers, especially as retailers and other service providers continue to offer them innovative ways to pay. An electronic bill presentment and payment (EBPP) solution can help insurance companies modernize the payments process and provide customers with the convenience and flexibility they desire. With the right partner, insurance companies can easily stay on top of evolving payments trends and manage everything under a single, simple to use platform.
Binder Payment Processing
A binder payment is an initial payment made by a customer towards an auto or health insurance policy. It is used by the insurer to bind the policy. Different from the first premium payment, binder payments must be processed separately and are subject to all sorts of regulations. The complicated procedures surrounding binder payments make them one of the biggest challenges affecting insurance companies today.
An EBPP solution can automate the binder payments process and help reduce operational costs. All payments activity can be consolidated into a single platform that ensures binder payments and regular monthly premiums are processed independently from one another. The system can also save customer information and make it easy to sign up for recurring payments so they don’t have to repeat the process when it is time to make regular premium payments. Without a payment solution, this process can be disparate and confusing for insurers and consumers alike.
Any business that accepts credit card payments must adhere to strict regulations surrounding the collection and storage of private consumer data known as PCI (payment card industry) compliance. For insurance companies that already deal with heavy administrative workloads, it often makes more sense to leave PCI compliance to the experts. Due to the relatively high level of risk they deal with through underwriting, many insurance companies simply prefer not to take on the additional risk associated with handling sensitive credit card data. Payments providers are much better equipped to handle PCI compliance on an insurer’s behalf.
A payments provider can minimize and even eliminate many of the unique payments challenges that affect insurance companies. A comprehensive payments solution makes it easier for insurance companies to keep up with consumer demand. It can also help seamlessly integrate the binder payments process with monthly payments and eliminate PCI compliance concerns. This makes the entire payments experience simple and seamless for end-users and also streamlines operations for insurers.
Contact us to learn more about the benefits of partnering with a payments provider.