Waiting on an insurance payment, for those in a tough spot, can be like watching grass grow while face-down in the grass. When lives need rebuilding, receiving funds quickly is more than nice-to-have.
Whether it’s someone who has lived through a storm like Hurricane Matthew and needing to repair their home or someone needing their car back on the road after an accident, policyholders want and need fast resolutions and payouts from their insurance companies. Today’s consumers increasingly expect payments to be processed quicker than ever before, and insurance companies are turning to newly introduced faster payment initiatives, such as Same Day ACH, to accommodate the demand.
For our latest Faster Payments Tracker™, PYMNTS caught up with Chad Hauff, who supervises payment and billing operations as Safety Insurance’s director of premium accounting, to discuss how insurance companies are trying to expedite the payments process using aging technology platforms.
Here’s a preview:
For the insurance industry, one of the biggest challenges is extending modern-day faster payment solutions through old-school legacy information technology platforms. Many companies across the insurance space are reliant on common business-oriented language (COBOL)-based platforms, which have been in existence since the late 1950s.
“You’re working with multiple systems that need to talk to one another,” Hauff said. “It’s tough to change a system that’s been in place and working for years. I don’t think anybody is averse to it. Consumers want it, and insurance companies want to provide it. It’s just always a lot more complicated than you really want it to be.”
Despite using decades-old billing and payments systems, the insurance industry has made strides toward making both more streamlined. From mailing paper bills to receiving them online, the industry is changing head to toe — from modernizing information distribution for its customers to upgrading its payments processing machinery.
“That’s the biggest change we’ve seen: the ability to transact electronically versus paper checks, money orders and cash,” he said.
Around the Faster Payments world
Blockchain seems to be the name of the game recently in faster payments, as there were many developments in blockchain technology in the space over the past month. A survey by the IBM Institute for Business Value revealed that 15 percent of financial institutions could be using blockchain technology within a year.
Similarly, ANZ Banking Group and Wells Fargo recently conducted several months of blockchain testing, which they believe can reduce the time and expenses involved with transferring funds. Meanwhile, multiple banks recently partnered to create a global payments interbank group focused on distributed ledger technology, according to financial settlement provider Ripple.
To download the November edition of the PYMNTS.com Faster Payments Tracker™, click the button below.
About The Tracker
The PYMNTS Faster Payments Tracker™, powered by NACHA, is your go-to resource for staying up to date on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology coming together to make this happen.