Eighty-three per cent of insurance claims are taking over a week to be paid out, according to a recent survey by Banking as a Service (BaaS) specialist, Contis.
Of this, over half (58 per cent) of customers wait an average of between one week and a month for a claim to be paid out. A further 25 per cent waited more than a month to receive their money.
Contis noted that payout times were being slowed due to ‘antiquated payment methods’, which it said were still ‘reasonably common’. It noted that almost a third (30 per cent) of claims were still being paid via cheque. It added that insurers’ user experience continues to lag other financial sectors.
Darren Lane, Business Development Manager at Contis, said customers were becoming used to seamless payment experiences in other financial sectors, and now expected the same from insurance.
“The emergence of fintech, and subsequently insurtech, mean we are seeing more traditional insurance companies built on multiple platforms and legacy technology rethinking their processes and products to meet evolving customer needs,” said Lane.
He added that: “In tough economic times, established insurance brands arguably have an edge, as customers trust these firms will stay solvent and be able to pay out claims. But this appeal only holds if dealing with these firms is stress free, with fast, digital pay-outs now a key part of customer expectations.”
Contis cited data from the UK Chartered Insurance Institute’s (CII) Public Trust Index, which showed that the speed of claims had risen from the seventh highest priority for consumers in July 2021, to the third highest in July 2022. Meanwhile, control over the claims process rose from the ninth to the sixth highest priority for customers over the same period.