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Prelude's Insights on Outbound Payments Blog

Mobile Disbursement Technology Set to Transform Insurance Industry

If You Are Not Embracing Mobile In To Your Disbursement Strategy,

 You May As Well Be Doing This!


From tin can to smartphone

The advent of the digital revolution has taken place so fast that it makes you wonder what we did before iPhones and Androids. Nearly every walk of life has been influenced for the better by the digital age, and even the insurance carriers are benefitting. You can now take a picture of the damage to your car, and send it directly to the adjuster for an estimate on the claim. While this convenient step saves the insurance adjuster a trip, it is mobile electronic disbursements that will have the greatest impact on the claimant’s life no matter the type of insurance policy. 

Every successful company must be concerned with cutting expenses to boost profit margins. This is especially true in the insurance industry where disbursing payments can consume a large portion of the net profits. Fortunately, the digital revolution has simplified the process by which insurance companies handle claims.

The technology to electronically transfer funds has existed for more than 65 years in the form of wires, ACH, credit cards and electronic checks. However, mobile banking and fund disbursement has taken this ability a step farther, increasing the ease with which money is transferred. In an instant you can either send or receive payments from a host of different sources including your insurance carrier. 

Using PayPilot to issue mobile claim payments

The newest disbursement solution for insurance carriers is the advent of smartphones and the tablets. Forbes.com estimates that by 2017, 87% of Internet traffic will access the web with a mobile device. As time elapses, the option of mobile disbursement will become ever more popular, and insurance carriers will need to adopt to remain not only profitable, but to stay competitive.

The money spent by insurance carriers to issue paper checks is often more expensive than initially realized. The sheer price of printing hundreds, if not thousands of checks to claimants, providers and vendors is a significant back-office line item expense over the course of just a year. The manual handling and postage alone is a cost that can be greatly reduced with just a little effort towards electronic forms of payment. This is why digital disbursement is such an attractive option, because it is less expensive than traditional payment method and far more efficient for both the payer and payee.

Mobile disbursement solutions for insurance carriers are almost always better for claimants and can improve customer satisfaction. Claimants appreciate that they no longer have to wait for days while the claim payment is processed internally at the carrier, then the typical delay for Postal Service delivery and then the inherent hassle of depositing and cashing the check. Even the deposit could be delayed as “good funds” until the bank clears the check.  Mobile disbursement gives the claimant nearly instant access to money needed to get shelter, pay bills and/or buy necessary commodities. This is why insureds become policyholders of their respective insurance carrier; i.e. in a fair exchange of their premium payments they believe the carrier will begin to make them whole again if they ever need to file a claim. As we now live in an “Instant Gratification” society, any unnecessary delay to their immediate need could be cause for them to become dissatisfied.

As more people learn of mobile banking and know that electronic forms of disbursement are available, it is highly likely they will expect the option of mobile disbursement as a prerequisite of doing business. Not offering it could be a competitive mistake.  And, with social media having become the world’s instant referral program, carriers need to be on their toes perpetually. Carriers can either use their resources to proactively offer their best disbursement options or use them in PR to handle the onslaught of damaging public opinion.

Mobile disbursements via smartphones

Mobile applications also make it easier for policyholders to post premium payments to their insurers. Many times, funds can be transferred electronically, eliminating the need to write a check or balance a checkbook. Mobile payments are the wave of the future, because of the ubiquity of mobile devices and Wi-Fi hotspots. Soon, electronic disbursement could be the only way insurance companies choose to pay their claimants. Prelude’s PayPilot® and PointPay® solutions make it easy for carriers to enable these forms of payment methods. Even the federal government is encouraging the development of mobile banking technology, because they spend billions of dollars printing and destroying paper money. Electronic transactions eliminate the need for paper money, saving the government and taxpayers millions.

Mobile disbursements give both the insurer and the insured the peace of mind.  The claimant gets their funds quickly and the claim closes faster with less adjudication. There is tighter control and an audit trail of the life-cycle of the payment. Reconciliation is faster and the near elimination of escheatment is a wonderful by-product. For more information about mobile payments and disbursement hub capabilities, solutions PointPay and PayPilot, click here.

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