- Posted by Optal
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Monday, 5 March 2018, London:
At Optal, we know the pressure insurance executives are under today. For many, the only certainty is uncertainty this year. Rising interest rates, staff and supply chain costs, continued pension headaches and a more general Brexit-related economic slowdown are all combining to create greater cost pressures. Longer-term commoditisation in many parts of the industry coupled with the impact of newer disruptive players have only added to these challenges.
But there are opportunities to reduce these pressures if finance chiefs focus on an area often ignored: how you pay suppliers.
Optal is reinventing B2B payments for the sector. Here are just three reasons why more and more insurers are choosing our Virtual Account Number (VAN)-based solution:
- Speed of payments
When the work to resolve a claim is approved, getting payments to the service provider quickly is important. It not only helps with supplier relationships and reduces stress for the claimant but can also end up saving the insurer money. Take motor claims: many garages will not release vehicles until they’ve received payment, but legacy approaches such as cheques and even bank transfers can take days to clear, assuming they even reach the correct recipient. In the meantime, the insurer may be forced to extend the replacement hire car, or even overnight accommodation, for the claimant.
These are all areas where customer experience can be improved by better payments. Once a service provider receives a VAN, they are guaranteed immediate payment backed by Mastercard.
- Automated reconciliation
Reconciling payees to their transactions is a fact of life for insurance companies. But those with large supplier networks can soon find the process overwhelming, leading to manual errors and large administrative overheads.
With VANs, every transaction has a unique number that enables automatic reconciliation, saving time and money and reducing errors. The VAN can also be enriched with other information which typical payment methods simply don’t have the data capacity for — such as claim numbers. This is good news for suppliers, helping to optimise and streamline the process at their end.
With Optal, insurers can focus on their customers rather than chase reconciliation.
- Margin improvement
B2B payments have for a long time been considered an immovable cost of doing business which erodes the bottom line. Insurers can, however, finally reduce those costs, and even turn settlement into a profit by uncovering and eliminating inefficiencies.
VANs can reduce the errors and administrative overheads associated with manual reconciliation. They also remove the costs associated with legacy payment methods, like cheques, which incur bank charges, and admin costs in printing and posting, as well as the paper itself. Then there’s security: unlike legacy bank transfers you do not need to know the sort code and account number of the garage’s bank in order to create a VAN, so the risk of misdirected payments is eliminated. VANs also offer a full audit trail and the ability to customise each payment with extra reference data to minimise fraud costs.
Optal’s preferred status with global card and banking partners lets us minimise transaction costs, and turn cost centres into profit centres via savings and rewards.
These are just a handful of the reasons insurers are turning to Optal to optimise their B2B payments. Maybe it’s time to see what we can do for your business.