5 Steps Insurers Can Take to Meet Consumer Demand for e-Payment Capabilities

The maturing of e-payments technology, changing customer demographics and the shift to a customer-centric approach to winning and retaining policyholders are combining to are compel insurers to change the way they interact with customers during the payment process. The author presents five steps toward adopting e-payments capabilities.

It should be no surprise that insurance customers are increasingly asking for electronic payments. After all, they can currently pay the majority of their other bills (utility, credit card, mortgage, telephone) this way. Insureds use a number of touch points including financial institution websites, insurance websites and customer focused consolidators like Doxo, Manilla and Pageonce. A critical mass of billers offering users the ability to view and pay bills has created an expectation among insureds. It’s placing insurance organizations that are not offering e-payments in a position where they need to be able to explain why they don't have these capabilities.

This critical mass phenomenon goes beyond electronic payments. Insureds are also expecting their insurance provides to interact with them where they have established an electronic relationship, gateway or community. Policyholders are using social networks and are reacting positively to insurance carriers that use these media to market services.

Mobile devices are the new desktop. They act as a gateway for many policyholders, not only to receive calls, but also to manage policies and claims, and to pay bills. Increasingly, policy holders are using this new gateway in a number of new ways including using mobile apps to manage polices, text to pay bills and scanning QR bar codes to receive policy quotes and other carrier information. In response to this demand for mobile capabilities, more insurers are planning to offer these capabilities. According to an Avoka study completed this year 39 percent of insurance carriers are planning to offer mobile billing, and 41 percent plan to offer claim status tracking.

Customer demographics are among the most powerful forces driving this change. The Gen y and Gen X cohorts that may not have been prime targets for insurance marketing 5-10 years ago, suddenly are driving change, and not just within their own circles but among older generations. By 2015 20.5 percent of the population will be between 30 and 50 years old; Generation X, and 26.7 percent will be between 15 and 34. Based on an April 2012 eMarketer study, CAGR for adoption of smartphone users within this demographic is 15.2 percent. This is fertile ground for smart insurers to yield competitive advantage.

Here are five things that you can do to embrace the change:

Identify a champion: Find someone within the organization who will sponsor and champion a strategy for e-payments and your emerging technology initiatives

Align the organization with an expert: Many organizations attempt to enter this process without a subject matter expert and it often costs more, takes longer and yields mediocre success.

Address e-payments strategically: You’ve invested in the internet and your website. They should do more for you. Too often organizations do not take a planned approach to e-payments and emerging technology. A reactive approach costs more and minimizes your chance to address customer need in a fluid way. The most successful companies develop a strategy, identify goals and measure their results.

Start small and grow: Budget one or two key initiatives and incrementally add functionality onto that foundation.

Structure your internal discussions around customer choice. E-payments represents a shift to an "outside-in" approach to customer relations, providing functionality according to the way customers, not back office insurance staff, see the world. Successful adoption of e-payments depends on fidelity to that approach.

About the Author: Grant Brown is senior consultant partner and chief executive officer of Raymore, Mo.-based Profluent ePayment Consulting.