The insurance industry is particularly behind the mark when it comes to the adoption of technology. This is not news. What is news, however, are the strides that companies around the world are making to address the issue, with innovative solutions coming onto the market that enable seamless claims payments for customers, and instant compensation for flight or baggage delays.
“There are actually some good reasons for our industry not having invested in technology,” opined Scott Rosen, Founder and CEO of MDAbroad. “In order to solve the issues of inefficiency that serve as an impediment to scalability in our industry, it would mean that providers and payers would have to agree upon and adopt some uniform practices, that would require agreement upon and adherence to standards. Unfortunately, both providers and payers have grown accustomed to not having standards, and have profited from the disparate and fragmented nature of the industry. But, at what cost?”
In order to solve the issues of inefficiency that serve as an impediment to scalability in our industry, it would mean that providers and payers would have to agree upon and adopt some uniform practices
When it comes to the payment processes for reimbursement from payer to healthcare provider, the industry needs more than technology to help make progress. Geopolitical tensions affecting the global economy, plus Covid-19, have meant that pressures on payers and providers are seriously impacting the industry and these issues are going to have to be addressed before the problem can be solved.
“Today, we have reached a point where the inefficiencies we see every day transcend the topics we endlessly beat to death in our traditional discourse,” said Rosen. “Issues like lack of billing integrity (providers abusing international patients and insurers) and payers not paying their bills are now overshadowed by the fact that we live in a new economic reality where a deteriorating macroeconomic landscape is making it harder to turn a profit. It is our expectation that the pressures on margins from inflation, a temperamental labour market, and general uncertainty, can provide the impetus for us to finally adopt better business practices that democratise access to care.” The industry could take the opportunity with which it is presented to impose good practices and standards that can ensure service delivery by payers and providers becomes consistent and predictable. “We are, after all, in the business of insurance, and we should aspire to establish rules and, consequently, better manage and predict the process and cost by which we deliver service to our members.”
According to Rosen, to accomplish this, the industry must look at the critical service junctures in the management of cases and claims as points where technology could be employed:
Invoicing and settlement.
Slow progress for insurers, driven by Covid
Over the last couple of years, it has been necessary for nearly all businesses to digitise in some way. The insurance industry is no different. Digitisation within insurance has occurred at varying speeds and with varying degrees of early success, but the net effect of reduction in costs and overheads and improvement in customer outcomes has been very clear. And so have the winners. Some businesses have excelled in their digitisation strategies and execution and those businesses are starting to operate more efficiently, Phillip McGriskin, Founder & CEO of Vitesse, told ITIJ. Others have not. “I expect that those others, who have been slower with their efforts, will speed up their own digitisation to remain relevant and competitive,” he added.
Whilst some markets are still in the dark ages of cheques and manual bank transfers, as well as significant backlogs in handling travel delay and luggage delay claims, others are moving at pace with direct reimbursement back to an actual or virtual credit/debit card, open banking integration directing payments straight into a bank account, payment into a PayPal account or even reimbursement via alternative resolutions such lounge passes, dining coupons or rewards points.
Not all markets around the world are at the same point of digital assistance acceptance, but the pace and take up is growing at speed.
Identifying pain points in the process to enhance services and cut costs
Founded by former healthcare executive Amy Brown, Authenticx makes it possible for healthcare organisations to have a single source of conversational data, creating powerful and immersive customer insight analysis that informs business decisions. Authenticx listens to millions of recorded conversations occurring within insurance customer service contact centres, using artificial intelligence (AI) and machine learning capabilities. Brown told ITIJ: “Ineffective insurer payment processes are one of the leading reasons for inbound calls to customer service, as well as one of the most prevalent pain points in the customer journey. The industry has made investments in technology to support online payment options for customers, with a goal of eliminating manual human-to-human interactions; that said, the industry is failing to listen effectively to how those tech-based payment processes are serving or disserving the population.”
digital payment and reimbursement solutions have benefits for all parties involved in the insurance process
Technology is already making an impact in many other industries’ payment processes, and these need to be addressed in insurance, according to McGriskin, who said: “Lots of businesses outside insurance have seamless payment processes, and swathes of choice for the consumer. These have been slower to arrive in insurance – both for how people pay, and perhaps more importantly the old adage about claims being an insurer’s shop window – how people are paid when the inevitable occurs.”
He added: “With an increase in payment choices for the insured, such as e-wallets and the ability to send funds directly to a customer’s card – not just the age-old paper cheque that inevitably doesn’t ever get banked – this gear change is a welcomed and much-needed introduction to insurers everywhere.”
Carl Carter, UK Country CEO for Blink Parametric, said digital payment and reimbursement solutions have benefits for all parties involved in the insurance process: “This approach to digital assistance and real-time payments is also proving beneficial for the TPA as well as the traveller, in that in many cases, the old fashioned use of insurer claims floats and manual claims handling resource can now be removed from the process via the use of digital parametric payments that can be deployed direct from an insurer’s account, an insurer’s credit card facility such as MasterCard Send, or international payment mechanisms such as Wise. This also means the TPA does not need to keep an eye on claims floats, or risk delays in funds being transferred from the insurer that could impact claims payment and service delivery if funds demanded exceeded the claims float.”
Speeding up the payments process
Sasha Gainullin, battleface CEO, pointed out that for 24/7 assistance services, guarantee of payment could, in theory, be issued immediately. Of course, we in the industry know that this isn’t always the case. “The key,” he said, “is making sure an assistance team is fully trained and authorised for handling these inquiries. Forms of payments are usually flexible and based on customer and healthcare provider preference. These would include the traditional bank transfer format, as well as payment to credit card, digital wallets and services such as PayPal. We want to be in a position whereby we are offering customers and partners a rapid payment via a method that best suits their needs.”
Forms of payments are usually flexible and based on customer and healthcare provider preference
Blink Parametric has partnered with a wide number of travel insurance companies and travel insurance brands now offering a range of real-time digital assistance solutions and resolutions. Carl Carter spoke to ITIJ about the sea change technology is making to the way the insurance industry can interact with its customers: “By delivering technology and data-led assistance direct to the travelling consumer and their smart phone, we are turning the traditional customer experience and frustration of a travel or luggage delay claim into customer surprise and delight without the need for phone calls, human intervention or claims forms that can often add to customer frustration weeks after the event occurs.”
Could software provide an answer for the issue of payment guarantees? “Smart contracts need to be programmed in some sort of platform,” explained Rosen. “That smart contract would essentially act as a payment guarantee backed by money. The provider has confidence that the cash is there and there will be instant payment (solves the problem of having to chase a payer) but the transaction is governed by contractual rules. Only when rules are met does money flow from the payer; most importantly, even if the payer decides not to pay for any reason, if smart contract rules are met, payment goes out, irrespective of the payer being cheeky or inefficient (the familiar ‘we need additional info or we need to confirm with member’).” In smart contracts, both sides – payer and provider – agree to the rules ahead of time and these are written by humans before being held on a secure platform until they are ready to be deployed. “Any platform needs to get all sides together to agree upon rules and build consensus on a general standard,” said Rosen.
In 2019, Rosen and his team embarked on a journey to develop a web-based platform that could address the critical payment junctures in international patient care payments with a view towards creating a single platform for payers and providers who act in good faith to interact and transact. “It is vital to understand we operate in a niche – cross-border case management and claims settlement – and it does not afford any specific company the critical mass to impose a universal standard or protocol to govern the interaction between healthcare payer and healthcare provider,” Rosen told ITIJ. “For this, we need to act together as an industry. We felt that the only way to do this was by creating an agnostic platform, whereby we can work on the basis of gaining consensus from both the largest players concerning what will make a platform workable for all parties.”
Is crypto a payment option?
In travel insurance, Etherisc launched its flight delay product earlier this year. The open-source technology accepts cryptocurrencies and can autonomously issue policies and execute payouts for travel delays to insurance policyholders. FlightDelay is available for global passenger flights operated by the world’s top 80 airlines, and offers policies purchasable via Etherisc’s dedicated FlightDelay Portal.
Payments are processed through blockchain payments program Gnosis Chain (formerly xDai Chain), with an initial payment option of the US dollar-backed USD Coin. Further conventional fiat currency and cryptocurrency payment options are currently in development. Being fully decentralised, the insurance risk pool is generated entirely by members of the Etherisc community who actively commit their assets to the ecosystem’s decentralised insurance protocol (DIP) token.
Elsewhere, Massachusetts-based Premier Shield Insurance agency allows policyholders to pay premiums with Bitcoin up to a value of US$5,000, but it does pay claims in Bitcoin. AXA Switzerland, Atupri Health (also in Switzerland), and Universal Fire & Casualty Insurance Co. also accept premium payments in cryptocurrency.
Using technology to our advantage: where can technology be deployed?
Battleface is targeting specific areas for ongoing technological innovation that will benefit customers:
- Multichannel and dynamic claims intake (website, phone app, email, calls)
- Immediate claims even verification and settlement
- Faster claims review and updates through automation (integrate AI and machine learning to improve the decision process)
- Flexible and faster payment (by leveraging both traditional and digital payment options).
Gainullin said: “We are constantly striving to find ways in which we can improve and innovate our customer experience: a simple, jargon-free online claim intake process that feeds into an adjudication ecosystem that leverages both human expertise and decision algorithms. Our focus is on ease of use, speed, accuracy and on being accessible to our customers in the way they feel most comfortable. We apply the same tech platform and standards to our distribution partners.”
Using tech solutions, the insurer gets a more cost-effective claims operation, better decision accuracy and more satisfied customers. Distribution partners also see benefits from customer higher conversion rates and improved lifetime value metrics.
Brown commented: “One way leading insurers are starting to leverage technology in a new way is to diagnose and measure these problems including AI and Natural Language Understanding technologies to listen ‘at scale’ to the customer voices that are naturally flowing into the contact centre every day.” In these recorded conversations, insurers can identify the root causes for inbound calls, including specific and detailed complaints or points of confusion about the premium or claims payment processes.
Using tech solutions, the insurer gets a more cost-effective claims operation, better decision accuracy and more satisfied customers
Providing customers with the user experience they are getting in other industries is key to increasing public trust in insurance, and allowing them to use familiar technology in a new way to manage the insurance purchase and claims process is essential. McGriskin told ITIJ: “As technology plays a bigger part and digitisation progresses throughout the insurance industry, bringing new styles of cover and ways of initiating and paying claims, payments and treasury will most definitely play a significant role. We are increasingly seeing insurers trying to provide greater experiences ... particularly on the checkout experience. Offering as much choice as possible and a seamless user flow in insurance claims payments is paramount, and the market needs to enable customers to choose exactly how they want to get paid.”
Carter of CPP believes that better use of technology offers the industry a prime opportunity to recover from the impact of the pandemic, emerging stronger and more powerful: “Technology is building consumer trust back into travel insurance, allowing travel insurance brands to innovate and differentiate themselves whilst also reducing operating costs. A real cash payment or lounge pass solution can be delivered into a traveller’s hand quicker than if they were to dial the assistance company, let alone speak to anyone. This technology-led assistance is also increasingly attractive to the younger traveller who does not have the appetite to wait in call queues or fill in forms.”
It’s an ongoing learning process for everyone – tracking progress over time to make sure solutions being put in place really are working for the insurer and their customer is key to meeting customer expectations. Investment has been available for a while now as a trickle, but it seems like as companies realise the potential technology has to improve processes both for them operationally, and for customers from a service perspective, this trickle may soon turn into a flood.