Three reasons global insurers should prioritise payments in CX strategies

Improving customer experience (CX) is top of the agenda for insurance companies across the globe. It is a way to set your product apart in a highly commoditised sector that, for years, has experienced a challenging macro environment resulting in premium increases. Investing in CX drives operational efficiencies and delivers multi-layered wins for insurers that will, ultimately, improve their bottom line. However, the sector has a challenge to overcome: insurance has far fewer customer touch points than most other sectors, meaning there are fewer opportunities to create the ʻmoments of delight’ that come together to create a great customer experience.

There is one customer touch point that insurers often overlook: payment. Here are three reasons insurers should prioritise payments in their CX improvement strategies:

1. Digital payments and CX are in demand by consumers

Customers expect a seamless digital experience at every stage of their journey – 80% of insurance customers would switch carriers if they lacked a user-friendly digital interface, according to PWC¹. Consumers are also increasingly choosing which companies to give their business to based on the digital payment options available².

Global insurers are particularly vulnerable because, in many distribution channels, international payments still involve a high level of manual work on behalf of the customer and the carrier, resulting in internal inefficiencies and a poor experience for customers.

Investing in CX drives operational efficiencies and delivers multi-layered wins for insurers that will, ultimately, improve their bottom line

As the digital payments landscape evolves rapidly, driven by consumer preferences for convenience, security, and flexibility, insurers should look to provide international customers with quick and easy payments, including convenient local payment methods. In doing so, the most frequent customer interaction will be transformed into a personalised, frictionless CX touch point.

2. Payment ease creates a ‘moment of delight’ that is a loyalty driver

Giving clients exactly what they need in the form of lots of tiny ‘moments of delight’ creates great customer experience. In insurance, because these moments are far less frequent than in other sectors, it is important to get each one right. The customer’s entire experience must match up to the promise of the product or service they are buying, and CX continuity is a critical differentiator in one of the most commoditised sectors.

Unfortunately, many insurers have yet to achieve true continuity when it comes to payment because legacy systems are letting insurers down.

Easy payment is one of the things customers value most when it comes to their interactions with companies³. What constitutes an ‘easy payment’ differs among generations, with younger generations choosing digital wallets or payment apps and older ones preferring cards. But, most importantly, as well as the payment options insurers offer heavily influencing customer purchasing decisions, if they have a bad experience it is a prime reason for switching providers.

With heightened customer expectations, insurance firms must promptly adjust to deliver smooth, customer-focused payment processes. By modernising operations and enhancing the payment journey at every step, insurance carriers can meet these evolving expectations, uphold customer trust, and drive business expansion.

3. Improving payments CX will drive internal efficiencies, cost savings for clients

Legacy systems and outdated payment processes not only hold customer experience back – they block efficiencies for the business. With the right technology, you can:

Reduce short payments due to transaction fees and FX complexity

Global insurance policies are often underwritten in no more than a few currencies (mostly just one), meaning customers in most countries have to work out the cost of their policy in their local currency. Along with high transaction and conversion fees that are added along the way, FX fluctuations can mean customers lack clarity on the true cost of the transaction, while the insurer could receive a short payment.

The customer’s entire experience must match up to the promise of the product or service they are buying

Automate reconciliation to improve manual and time-consuming operations

Once a customer has sent an international premium payment, it is the responsibility of the carrier’s customer service or collections teams to mark the payment as received in their system of record. Depending on the payment method, this could mean reconciling bank and merchant statements, and, oftentimes cross-checking multiple systems and vendors to piece together incomplete data so they can know who paid what. This is the process when there is no issue with the payment.

When a payment gets lost, disputed, or delayed, or if the amount received is short of the full amount, it strains back-office teams, who are fielding calls from the policyholder, payment providers, and banks involved. Either way, it is a poor customer experience, and can delay coverage or drive customers to switch carriers.

Give access to local language support

Insurers struggle to provide payment support to their customers in local languages. This means that if a customer and customer service agent do not share a common language issues will be harder to resolve.

With the right technology, insurers can offer clients:
• Local payment options (whilst limiting FX risk)
• Full cost transparency by automating currency conversion and transaction fees
• Total visibility with payment status tracking, speeding up coverage confirmation.

Digitising cross-border payment processes presents a big CX strategy win for insurers, enabling them to focus on what matters most – delivering relevant and useful products to clients across the globe.

1. www.pwc.com/us/en/industries/insurance/library/assets/next-ininsurance-
   overview-01-04-22.pdf
2.  www.pymnts.com/study/the-how-we-shop-report-september-2020/
3. www.pwc.com/us/en/services/consulting/library/consumer-intelligenceseri…
   future-of-customer-experience.html