The payment experience plays a role in how consumers choose a property or home insurer, not just how they pay once a policy is in place.
The PYMNTS Intelligence playbook “The Service Commerce Performance Gap: Insurance Providers Playbook” found in October that 44% of policyholders said preferred payment options were a reason to choose a provider. Another 34% said they wanted more flexible payment or billing options.
Insurers provided some of that flexibility. The playbook showed that 53% of them let customers set up installment plans without calling the company. That compared with 35% across the four service categories covered by the broader study, which included healthcare and medical providers, auto lenders and utilities. Insurance providers offered installment plans more widely than any of the other industries studied.
Other payment accommodations were also common. According to the playbook, 73% of insurers offered payment extensions or grace periods, 78% offered installment plans, 57% allowed customers to reschedule a payment, 55% accepted partial payments and 43% allowed due-date changes.
There were some differences in how easily policyholders could use these options themselves. While 53% of insurers made installment plans available through self-service, only 13% provided self-service access to payment extensions or grace periods. The playbook revealed that 48% allowed customers to reschedule payments themselves, while self-service availability fell to 20% for partial payments and 32% for changing a due date.
The data showed that the companies themselves can make more of these existing choices directly accessible to policyholders and cement loyalty.
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Payment Methods Add Another Dimension
How consumers pay provided another measure of payment choice.
Digital wallets ranked fourth among policyholders’ preferred payment methods. The playbook found that 34% wanted to use them, while 20% of insurance providers offered them. Meanwhile, 14% of policyholders wanted third-party buy now, pay later (BNPL) as an option, compared with about 2% of insurers that provided it.
Paper checks showed the opposite pattern. According to the playbook, 93% of insurers accepted them, but 21% of policyholders said they wanted that option and just 3.8% used checks as their primary way to pay. Bank transfers and credit cards, by comparison, were among the most widely available payment methods.
Payment choice also varied by generation. Among Generation Z policyholders, 42.2% said the ability to pay using their preferred method fell short of the ideal. The share dropped to 6.4% among baby boomers and seniors. Across all policyholders, 10.9% identified a shortfall in preferred payment methods.
Insurers appeared to recognize the importance of flexibility. The playbook revealed that 45% said it was very or extremely important to customers. Investment, however, remained concentrated elsewhere, as half of insurers were actively investing in bill delivery, compared with 11.7% in payment flexibility and 6.7% in expanding the breadth of payment options.
The existing installment plan infrastructure offers one route for expanding payment choice without creating an entirely new billing model. Insurers already make that form of flexibility available through self-service more often than the other industries studied. Applying the same approach to payment extensions, due-date changes and a wider range of payment methods would give policyholders more direct control over an experience that already factors into how many of them choose their provider.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
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