Most consumers don’t exactly hold the highest opinion of the insurance industry.
In fact, health and property and casualty insurance companies are, on average, rated the worst in the financial and insurance industry when it comes to customer satisfaction— and these rates are on the decline, too, according to the American Customer Satisfaction Index.
There’s good reason for that, of course, Lynn Cirrincione, director of cash and banking for Allstate Insurance Company, told PYMNTS in a recent interview. Namely, consumers aren’t getting what they want from their insurers.
“People pay their premiums all the time in the hopes that they never have to use their insurance,” Cirrincione explained. “But when they do need to use their insurance, they typically believe the insurance industry is slow moving and not all that innovative.”
Cirrincione and her team, however, are working to change that. The insurance company is working with new technology that can speed up the claim and payout processes, eliminating checks and allowing claimants to receive payments on their claims quicker— after a car accident or incident at home.
Cirrincione described a new payment method for the company, called QuickCard Pay, which enables Allstate customers with approved claims to receive payment instantly, via push payment. She said the new technology could help change the industry’s perception among consumers.
“If we’re able to settle their claim quickly so they can get back on their feet, they can get their car repaired or get their family into safe housing,” she said. “If you can change the perception of an insurance company from being slow moving, with a cumbersome claims process that people in general aren’t happy with, it changes the whole industry.”
Riding the rails
To receive instant payments – the funds take about 10 seconds to hit a customer’s account, Cirrincione told PYMNTS – customers must have an existing debit card.
After an adjuster completes a claim and a settlement is decided, customers can choose the QuickCard Pay option, or adjustors will offer it to them if they are unsure of how they would like to be paid.
If customers do have an existing debit card account, payment will be sent over debit card rails, which allow the payment to be processed instantly, rather than having to wait for less immediate batch processing. In order to push payments and provide speedier settlement payouts over debit rails, Allstate partnered with payment processing and settlement bank partners to gain access to the rails.
But securing those partnerships and convincing processors and banks to green-light these transactions was no easy task. In most cases, Cirrincione explained, outside of push payments— where a customer is receiving a credit to a debit account— that credit is a return of a purchase already made. Without that original purchase, however, some payment partners were hesitant to allow the credits because there was no history associated with them.
“Really, it was all about opening up the insurance industry and the credit card and debit card payment industry,” she said. “All these card networks and banks need to be on board to allow this type of transaction— and it’s a little different, and so we had to work with these companies to explain that, and to make it work.”
Getting up to speed
For Allstate, convincing those payment partners wasn’t an easy task.
Because of the unfamiliar transaction type, and with consumers more concerned about security than ever before— especially when it comes to financial information— processors and financial institutions needed to be assured that the process was reasonably safe from fraud risk, Cirrincione said.
“A lot of the issues were typical financial transaction concerns. It was all new, so all of the networks and the industry had to create a code, so when that transaction comes through on the debit rails, they know to look at it a bit differently,” Cirrincione explained. “So a lot of it was just education, making sure everyone understood fraud concerns, and making sure they could take the new technology and implement it correctly.”
These educational efforts were particularly important given the reputation of the insurance industry to be slow moving or withholding when it comes to settling and paying out claims. If a customer was unable to get a payment in the time promised, it would likely damage a company’s relationship with that customer irreparably, and constant issues would likely only bolster the industry’s negative reputation.
“The worst thing would be to offer a service like this to our customers and then to have those customers’ bank or debit card processing network decline the transaction,” she said. “That doesn’t help anyone involved – and that’s what we’re trying to get to with this – to make it something that helps customers get their money quicker and helps insurance companies improve their customer service and relationships.”
From laggards to innovators
So far, the new push payments feature has found an audience among Allstate’s clients. The program has been available for about seven months, Cirrincione said, and adoption has increased after starting off slowly after its late 2016 launch. As of May, the company had processed over 300,000 payments via the QuickCard Pay program, with the transaction values reaching as high as $10,000, she said.
Cirrincione said that other insurers will likely begin to offer similar services, and said she knows a few competitors are currently working with processors and settlement banks to establish debit rail programs of their own. And, perhaps surprisingly, she’s happy to have the competition.
“I think it will become the norm in insurance companies. We actually like that, because it can help more customers and the more it gets out there, the more it makes it better for the whole industry,” she explained.
In fact, Cirrincione said, with improvements in technology and recent marching orders from the Fed mandating faster payments systems, this payment method could make its into the insurance industry and beyond, into practically any field.
“Anytime you’re paying anyone, this can help. Anytime you can take a check out of the payment process, it’s a win,” she said. “This is available to anyone that has a debit card. So if you run a small business and you have a debit card assigned to your bank account, this will work for you.”
If instant push payment disbursements can put money in policyholders’ accounts quickly, perhaps it won’t be too long before perceptions about the industry start to shift.
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