Consumers have ever-growing expectations for the products they use, and insurance is no exception..
Driven by the rise of FinTech and the success of challenger banks, a new breed of InsureTech startups are pushing the boundaries of the insurance industry, rethinking business models to improve security, enhance customer experience, and broaden their product offering.
Insurance is a fertile ground for tech innovation, and organisations who take advantage of the latest technologies could gain a significant boost over the competition.
One tech innovation that is transforming insurance is the use of prepaid cards. Insurers are increasingly seeing the benefits of issuing prepaid cards, with the potential to not only elevate their customer experience, but to drive loyalty and even access new revenue streams. So how are insurers using prepaid cards?
Streamline payouts for all customers
Making an insurance claim is likely to be a stressful process for most people, and with customer experience a key differentiator in a competitive market, insurers are constantly on the lookout for ways to make their customers’ lives easier by streamlining their processes.
For insurance payouts, virtual cards offer a simple, clear method of distributing funds that works for everybody, with no risk of mistyped bank account numbers and no time spent waiting for payments to clear.
Not only are faster payouts good for customers, they’re better for insurers, too – the longer it takes to pay out a claim, the more the risk of inflated claims rises, and the higher the final payout could become. By offering an instant payout to a customer’s prepaid card, final settlements could be reached more quickly, reducing costs.
Simplify regular payments
For customers who are receiving an annuity, disability, or other recurring payments, a prepaid card is more convenient and more cost-effective than other payment methods.
The cost of the resources required to make a bank payment, or worse, issue a cheque, add up over time, particularly for recurring payments, so it makes sense to streamline these wherever possible.
Loading funds onto a prepaid card can be a cheaper, faster and easier option, with the ability to set recurring payments and the benefit of getting customers their funds instantly, with no clearing time.
Support customers in an emergency
In emergency situations, customers rely in their insurers to respond quickly and effectively – their wellbeing depends on it. For customers who are unable to access their bank accounts, for example if payment details have been lost or if they’re stranded in an unfamiliar country, prepaid cards make it easy to disburse funds when time is of the essence.
Cards can be issued virtually 24 hours a day, and made accessible to customers via card details sent over email. So wherever your customers are, it’s easy to get them the right support when they need it most.
Reduce fraud risk
Like any organisation, it’s vital that insurance companies do the right due diligence when disbursing insurance payouts, to make sure that the people receiving the payment are who they say they are.
With B4B Payments’ prepaid cards, Know Your Customer (KYC) checks are carried out when cards are activated, so you can be confident that funds are being sent to the right people. Sending payout funds to a prepaid card issued when a policy is purchased also ensures that there’s no risk of bank details being incorrect or out of date.
This is particularly true if customers are issued their card when the policy is purchased – their payout details are simply stored with their policy and no further checks are required.
Drive customer loyalty
Issuing customers with a branded prepaid card when a policy is taken out not only serves as a quick method of making payouts, but acts as a reminder every time they open their wallet. With a simple, quick payout mechanism on hand, there’s a strong incentive to take out additional policies with the same insurer and keep everything in one place.
Prepaid cards are also the perfect mechanism for incentivising customer referrals – cashback rewards can be loaded straight onto a customer’s card, providing them with a discount at renewal or allowing them to choose their own reward.
Access new revenue streams
Prepaid cards can also offer exciting opportunities for new partnerships or potential revenue streams. For example, a customer shopping for replacement products after a home insurance claim could be offered a discount for using their prepaid card with a selected partner retailer, or the card could simply provide access to a range of exclusive partner offers as a value-add.
The spending data available from prepaid cards is also a powerful tool for insurers – by building a better understanding of their customers’ behaviour, insurance brands can harness vital insights to develop improved product offerings and drive further competitive advantage.
Elevate your proposition with prepaid cards
Insurance payouts made by prepaid card, whether a single payment or a regular annuity, are faster, safer and more streamlined than bank transfers or cheque payments. More importantly, they offer exciting potential to improve your customers’ experience, make cost savings, and drive your proposition forward.
To find out more about our powerful prepaid card platform, get in touch today.