Insurance companies continue to be challenged in 2018 by macro-economic cost pressures, increased competition from disruptive digital players and rising customer expectations. That’s led to more “belt-tightening and doing more with less to shore up returns”, according to Deloitte. The global consultancy claims that insurers which make digital transformation a priority “are most likely to re-energise their cultures, as well as grow their top and bottom lines.”
In the quest to reduce costs and become more efficient through digital technologies, supplier payments is an area often overlooked. Optal offers insurance companies a whole new way to look at an area many just accept as a cost of doing business. We’re revolutionising payments to suppliers by stripping out hidden inefficiencies and optimising processes.
In our previous report we highlighted several ways in which insurers can optimise their claims payments, including speed of payments, automated reconciliation and margin improvement.
Here are three more reasons why global insurers are choosing Optal:
Extend the value of existing systems
Insurance companies have invested heavily in claims management and finance systems over the years. The former is a vital cog in the complex back-end IT machinery, which helps to manage the interactions between insurer, claimant and supplier. In turn, it interoperates with finance systems to notify of approved claims and then the finance system takes over to send payment instructions to the bank.
The beauty of the Optal Virtual Account Number solution is that it can be slotted into these IT environments without any need to replace or change existing systems. That means investments in claims management and finance technology can be preserved and ROI extended, unlike other ‘money-saving’ solutions, which usually require very large up-front investments in IT.
Optal works with and streamlines existing payments processes for insurers and their suppliers – few other digital solutions deliver nearly as much benefit or nearly as quickly.
A replacement for cheques
Why do organizations still use cheques? They are cumbersome, slow and costly – think of the time wasted just buying the stationery, printing, posting and then manual processing when things go wrong – like stopping a cheque. That’s not to mention the charges both insurer and supplier when issuing and banking a cheque. It’s also a process of uncertain duration and one lacking in transparency.
Optal VANs do everything a cheque does and more, but in a quicker, and more secure way which eradicates current costs. With Optal, insurers have the opportunity to add more details to the transaction, which can help prevent fraud, improve audit trails and optimise the entire process.
Protected by chargebacks
As VANs operate on the Mastercard network, insurers are protected by the chargeback mechanism. This is a valuable feature, given the potential risks of fraud, administrative mistakes and disputes with suppliers that can occur during a claim.
On occasion, car repair shops may not complete a job to the desired standard, so it must be redone. Sometimes a problem isn’t discovered until a repair company has already been paid. In these situations, the recovery of that money can be a painful process, but the chargeback mechanism is there to help insurers.
Finally, sometimes the claimant’s excess is accidentally included in payments to suppliers, which effectively means the insurer is over-paying. The chargeback process makes it easy to recover these funds from repair companies.
That’s three reasons why increasing numbers of insurance companies are turning to Optal to help optimise their B2B payments.