Insurance payouts: Improve customer satisfaction by accelerating claims and reducing overhead costs

Transforming an insurance claim into a speedy payout isn't just efficient — it's a beacon of customer trust and loyalty. One study from Accenture found that only 16% of policyholders are dissatisfied when their claim is handled within 48 hours. However, this figure jumps to 41% if the settlement takes longer than six months.¹

Understanding the growing need for digitizing payment processes and payouts

In the face of rising consumer expectations for infallible service, the insurance sector is not immune.

Companies that meet these demands through improved customer experiences enjoy big dividends: increased retention, new business growth, and improved operational efficiencies.³

It’s a necessary pivot in an industry once perceived as slow moving. Not to mention, many companies face mounting pressure from InsurTech startups known for their agility and tech-driven approaches.

This digital-first and customer-centric transformation is particularly pertinent in global payouts, an area where 82% of consumers have expressed a preference for real-time payment options such as push-to-card over traditional methods like checks.⁴

Why traditional claims payment processes are becoming archaic

The traditional, paper-based approach to claims payments is increasingly seen as outdated in our fast-paced digital world, given its:

• Slow and manual nature. In an era where speed and efficiency are paramount, protracted claim settlement times can leave customers feeling frustrated and undervalued.
• Risk of human error and fraud. Manual data entry inherent in traditional processes escalates operational costs and opens doors to potential fraud.
• Lack of transparency and tracking. For customers, the inability to track the progress of their claims in real time is another major drawback. Conversely, insurers are often left without sufficient insight into the overall efficiency of their claims processing, creating a disconnect between them and their clients.

Is it time to modernize your claims payment process?

In one study, 74% of dissatisfied insurance customers said they either changed providers (26%) or considered it (48%).¹ Given the stakes, insurers should prioritize modernizing their claim payment process.

Here’s how it can support business growth:

Reduced processing times and quicker payouts. Automation and streamlined workflows can reduce claims settlement time by up to 74%, according to one case study on an insurer’s health claims management process.⁵

Fewer manual errors. This can unlock cost savings and enhance overall operational efficiency.

Enhanced trust and convenience. Self-service portals and real-time claim-tracking technologies allow customers to monitor the progress of their claims at their convenience. Since 42% of customers do not trust the insurance industry, fostering transparency and trust is essential.²

Less fraud. By minimizing human intervention, automation can be a robust guard against potential fraud, a concern for both insurers and customers. Advanced analytics and data insights can also aid in identifying and preventing fraudulent claims while providing valuable data on claims trends.

Flexible payment options. Multiple payment options via a global payment processing platform helps cater to each customer’s unique preferences.

More actionable insights. This enables you to optimize processes, improve risk management strategies, and make informed decisions aligned with the evolving needs of the modern insurance market.

Leveraging advanced technology for insurance payouts

PayPal’s comprehensive online payments solution is a way to help accelerate digital transformation. PayPal can help insurers deliver an intuitive compensation experience that meets modern policyholders’ expectations for convenience, security, and speed, all while streamlining operations and reducing overhead costs.

There are additional perks, too, such as:

• Integrations of compensation payment technology with our drop-in transfer UI and API.
• More preferred payout methods like direct bank deposits or real-time deposits to bank cards and PayPal or Venmo accounts.
• Lower fees for failed or returned payments.
• Improved payment visibility and fund disbursement tracking.
• Notifications to policyholders when funds are available.

As your business expands, our open, flexible, and scalable platform is designed to help meet the needs of your business and payees, wherever they are.