With customer satisfaction dropping and nearly one-third of policyholders switching providers in the past year, the insurance industry is under pressure. In this month’s “Money Mobility Tracker®,” insiders explain how fully digitizing the claims process can speed payouts to give insurers a competitive edge.
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Across the world, insurance companies and InsurTechs are exploring how to use digital solutions to improve nearly all aspects of the insurance process. In Europe, for example, close to 90% of insurance firms have embarked on some sort of digitization initiative to improve the customer experience, especially for digital-first customers. The use cases are seemingly endless.
In an interview with PYMNTS, Meeri Savolainen, co-founder and CEO of German InsurTech startup INZMO, explained how her company built an online insurance platform that provides a fully digital user experience. Too often, she said, the process of applying for insurance is not entirely digital, especially during the claims process. Savolainen said this is why INZMO only sells policies that can be fully managed online. The company also has plans to automate the claims process.
African companies are also pursuing digital innovation in the insurance industry. PYMNTS spoke with Kiaan Pillay, co-founder and CEO of Stitch, a South Africa-based FinTech, about how the company is using application programming interfaces (APIs) to improve the payout process in Africa’s insurance sector.
He explained that many insurance claims are currently run only in batches on certain days of the week, a process involving manual entry of payouts that may number more than 5,000. It can therefore take days to weeks for policyholders to get their money. To remedy this slow process, Pillay’s FinTech launched Stitch Payouts, which allows insurers to automate settlements and make real-time payments through Stitch’s APIs.
“It’s one API call across any of the banks here in South Africa, and instead of needing either someone to do it manually or a payments operations team to do this on some sort of batch cadence, you can do it on a per-transaction basis,” he said.
Elsewhere in Africa, Kenya-based InsurTech Turaco is leveraging digital technology to help uninsured individuals get coverage. In an interview with PYMNTS, Ted Pantone, Turaco’s CEO and co-founder, explained that the current insurance model is leaving too many Africans uninsured. His company is looking to change that by altering the way insurance is distributed. Instead of using the legacy agent-driven sales model, Turaco is using a digital-first approach centered around partnerships to advertise, sell and ultimately deliver insurance policies. Partners include banks, mobile network operators, gig economy providers and a smattering of other stakeholders.
“It works really well because it’s a nice new revenue stream for all the partners that we work with, without them having to do a whole lot of work for it,” he said. “And it’s a very effective model for us because it enables us to achieve a lot of scale very quickly
Pantone added that the company has audacious plans to insure up to 1 billion people as well as radically speed up the payout process.
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