The insurance sector is transforming. Faced with major macro-economic, regulatory and societal changes, industry players are increasingly looking to become more agile and responsive to their customers’ evolving needs.
But as AXA UK&I CEO Claudio Gienal said recently, in order to empower people to live better lives, insurers must first put the right foundations in place. This is where payments are crucial.
Insurance is changing
Insurance is a sector unlike many others in that it touches most aspects of people’s lives: from their cars to their homes, their health to their careers, and even their cherished pets. This gives insurers an unrivalled opportunity to help build a better, safer, happier society. And the impact of insurance continues to grow as innovative new policies hit the market, to provide cover for everything from washed-out music festivals to delayed flights.
Much of this innovation is being fuelled by smarter use of data, including AI algorithms, and a recognition of growing customer demands for simplicity, speed and personalisation.
Why payments matter
We’d argue that for insurers like AXA to fulfil their ambition to truly empower customers, they first need to get payments right. Why? Because at a very basic level, you can’t settle a claim without paying a customer or supplier. And you can’t sell insurance without settling a claim.
Yet legacy payment processes are ill-equipped to support the new products customers and partners are demanding — and they also add extra cost, complexity and friction to traditional types of insurance.
This is why we advocate a digital twist on a proven alternative – virtual cards. Using a digital version of the payment cards we all carry can help insurers deliver on the promise of parametric and other innovative products without pushing premiums up. Equally, these seamless, automated pull payment systems can make existing insurance models even better by reducing time-sensitive costs and even generating rewards on each transaction.
A brighter future
Optal is already helping some of the biggest brands in the sector to deliver for their customers by taking risk and friction out of the claims payments process. With a speedy, zero-cost digital payment system that didn’t require it to capture, validate and securely store payee bank details, Allianz was able to launch a new warranty product to cover second-hand cars, for example.
AXA’s UK strategy reminds us of the “noble purpose of insurance” in helping to build a better society. With the right digital payment systems in place, insurers can finally realise this vision and drive value for themselves and their customers.