Improving customer experience (CX) is top of the agenda for insurance companies across the globe. In a world where insurance is highly commoditized in the eyes of policyholders and price rises are the inevitable result of a challenging macro environment, it is the only real point of differentiation they have.
Investing in CX drives operational efficiencies and delivers multi-layered wins for insurers that will, ultimately, improve their bottom line, making CX a key predictor and indicator of financial and business outcomes. However, there is one CX touchpoint, by far the most frequent, that is commonly overlooked-payment. And for global insurers where payments are often made overseas, things become even more complex.
Here are three reasons payments should feature in any insurer's CX strategy.
1. Digital payments are in demand by consumers
According to McKinsey, more than nine in ten US consumers say they have used at least one or more digital payment methods in the past year. Adoption is greater among GenZ and Millennials compared to Boomers, and consumers are increasingly choosing which companies to give their business to based on the digital payment options available.
As the digital payments landscape continues to rapidly evolve, driven by consumer preferences for convenience, security, and flexibility, insurers should look to provide international customers with quick and easy payments, including convenient local payment methods. In doing so, the most frequent customer interaction will transform into an engaging CX touchpoint.
2. Digital CX impacts customer satisfaction, key to protecting against churn
CX touchpoints are far less frequent in insurance than in other industries making it important to get each one right and customers have come to expect seamless digital CX at every stage of their journey. In fact, PWC reported that over 80% of insurance customers would switch carriers if they lacked a user-friendly digital interface. But, when it comes to payments, legacy systems are letting insurers down.
Global insurers are particularly vulnerable because, in many distribution channels, international payments still involve a high level of manual processing, resulting in internal inefficiencies and a poor experience for customers.
Imagine a policyholder in Brazil. To purchase a global health insurance policy underwritten in USD, they must go to their local bank, manually complete the relevant forms, pay steep fees to convert their BRL into USD and then send their money overseas. International transfers can take weeks, causing payment delays for the insurance carrier and a lengthy inconvenient experience for the policyholder. If they pay using a credit or debit card (which is rarer than one might expect), foreign transaction and FX fees will be added to the charges imposed by the insurance company making the overall cost of their premium much more expensive than they expect.
At no point during the payment process does the customer have any visibility of the progress or status of their payment, which means if their payment fails they won’t know until it is too late.
Particularly for global insurers, digitizing cross-border payments; offering local payment options to payers (whilst limiting FX risk) and providing transparency throughout, will be a big CX strategy win.
3. Payment ease is a loyalty driver
When it comes to their interactions with companies, easy payment is one of the things customers value most. What constitutes an “easy payment” differs among generations, with younger generations choosing digital wallets or payment apps and older ones preferring cards. But, most importantly, the payment options insurers offer their customers heavily influences purchasing decisions. Consumers are also more willing to switch providers based solely on their payment experiences.
With increasing globally mobility, the ability to accept and process payments anytime, from anywhere has become critical. Because many global insurance companies only underwrite policies in a few currencies they struggle to easily take payment in any other currency. They also struggle to scale to offer expert payment support to international customers in a variety of languages and time-zones. Together, these issues make it hard for global insurers to be as customer-centric as they need to be to succeed.
The insurance sector finds itself at a pivotal moment when adopting innovative payment methods is crucial for maintaining relevance and success in an increasingly global market. With heightened customer expectations, insurance firms must promptly adjust to deliver smooth, customer-focused payment processes. By modernizing operations and enhancing the payment journey at every step, insurance carriers can meet these evolving expectations, uphold customer trust, and drive business expansion.
Find out how Flywire can improve cross border insurance payments to deliver a better customer experience
Read more
- Watch our webinar “Maximizing CX in cross-border insurance payments”
- Read our takeaways from the Insuretech Insights Europe 2024 conference
- Find out what’s on the minds of international students when they are purchasing health insurance