DEEP DIVE: Same-Day Insurance Claim Settlements

Filling out an insurance claim is typically preceded by an unfortunate and unexpected event like an illness, injury, accident, crime or natural disaster. That setback often means consumers want and expect access to their insurance claims payouts as soon as possible. After all, the sooner their funds are delivered, the sooner they can defray the costs of recovery, repairs and other expenses, and get their lives back on track.

Despite this urgency for speedier disbursements, the $1.1 trillion insurance industry has continued to rely on legacy methods and processes. As such, consumers typically wait days, if not weeks, for their claims to be delivered as paper checks in their mailboxes. Fortunately, though, that’s all beginning to change, and insurance providers are turning to emerging technologies to pave the way for faster and more convenient disbursements.

Apps And Auto Repairs

Auto glass repair and claims management company Safelite Solutions is looking to smartphone apps and a new partner to offer customers same-day claim disbursements. It recently announced a collaboration with Ingo Money to provide instant payments for insurance claims via a one-time-use mobile app. The app moves claims along more quickly, according to Jon Cardi, Safelite’s senior vice president of strategic client sales and support, shrinking the traditional 14-day claims-to-payment cycle to just a single day.

Cardi described mobile apps as “game changers” for the claims disbursement process, largely because they offer the ability to turn a friction-filled game of telephone tag with an agent into a self-service process. For example, a customer who has been in a car accident can simply download the mobile app, upload photos of the damaged vehicle and receive an estimate within approximately one hour. Funds are disbursed instantly via Visa Direct, once that customer accepts the estimate’s conditions, and can be used at the auto shop for repairs. Should ancillary repairs be needed, Safelite can have funds pushed from the insurance firm directly to the body shop.

The solution aims to help Safelite deal with a growing glut of annual claims, including 20 million for auto, and enable a more streamlined user experience, Cardi said.

“This is total disruption within the insurance industry,” he emphasized, and on a significant scale.

Taking The Pain Out Of Insurance Settlements

Other outside players are looking to tackle the insurance payout pain points. Boston, Massachusetts-based auto, home and business insurer Safety Insurance said it will roll out Same Day ACH payment capabilities for insurance claims. It is teaming up with NACHA – The Electronic Payments Association to make this happen.

In a statement, Chad Hauff, director of premium accounting for Safety Insurance, noted that claim disbursement speed isn’t only a matter of convenience, as it can also determine whether a victim of a natural disaster will have a place to sleep.

“In a storm or a disaster, there can be disruptions that make it impossible to mail a check,” Hauff said. “For someone who doesn’t have a large bank account, that money may give him the opportunity to buy food or pay for a hotel.”

The (Faster) Future Of Insurance Claims

Auto insurance players on the other side of the world are also looking to enable same-day auto claims, though customers may have to wait a bit longer for these capabilities to become available.

Japan’s largest insurance agency, Tokio Marine Holdings, recently announced it would begin offering same-day auto insurance payouts by 2020, collaborating with American artificial intelligence (AI) developer Metromile to do so, and cutting the claims process by as much as two weeks. The company recently participated in an investment round, too, joining a group that includes Canada’s largest insurer, Intact Financial, in investing approximately $135 million in Metromile earlier this year.

Other Japanese companies are making similar moves. Fellow insurance player Sompo Japan Nipponkoa Insurance has invested in U.S. on-demand property insurance company Trōv, part of its own plans to offer same-day insurance payouts for stolen items like cameras. The pair has a shorter timeline for full-scale rollout, however, planning to roll out within the year.

As insurance claim disbursement solutions continue to evolve, consumers’ calls for faster claim payouts are only likely to grow louder. It does appear that insurance players have realized the importance of offering speedy disbursements to their clients, though, based on recent investment activities. While many consumers may hope they never to have to file a claim, they will expect to be able to access those funds ASAP should the unexpected arise.

About The Tracker

The Disbursements Tracker, powered by Ingo Money, is the go-to resource for staying up to date on a month-by-month basis on the trends and changes in the digital disbursement space.