A Superior Experience: Digital Insurance Premium Refunds & Agent Commission Payments

To account for a reduction in driving during the pandemic, auto insurers gave back more than $18 billion in premiums, according to Insurance Journal¹. That’s a great deal of money, but unfortunately, not all auto insurance customers noticed. A J.D. Power study² found that only about 52% of auto insurance customers knew about the refunds. Those who were aware of the refunds had a more positive perception of their insurer’s brand than those who did not.

But refunding insurance premiums has been a tricky business. According to Property Casualty 360³, some insurance companies provided a credit, while others offered a one-time refund. It takes time to calculate and process all of these credits and refunds, and maybe that’s why marketing and communication efforts have seemingly lagged. No matter the reason, it’s evident insurers didn’t effectively communicate their intentions or adequately leverage the opportunity to deepen policyholder relationships at a time of uncertainty.

According to Car and Driver⁴, a report from the U.S. Public Interest Fund found that the premium refunds haven’t kept up with the promises made earlier in the pandemic.

To customers, this is frustrating. It may also be perplexing. Why are insurance companies having such a hard time sending refunds? After all, insurers process payments all the time. It should be easy.

But that’s not exactly true. Insurance companies process premium payments all the time, yes, and they process claim payments – but COVID-19 refunds that had to go to every single customer are a different matter. At the same time, many insurers still use paper checks for outbound payments, and that takes time and resources, especially when it’s done on a scale this large.

Things might have been different if insurers had already adopted a digital payment disbursement platform.

The Need for Digital Premium Disbursements

While most insurers have accepted inbound digital premium payments for a while, many have been slower to adopt an outbound digital disbursement strategy. In fact, many insurers only use outbound digital payments for insurance claims. This begs the question … why stop there?

The answer is … there’s not really a good answer. It’s time for insurers to see how else they can leverage the convenience, cost-savings and efficiencies made possible by digital disbursements.

Insurers can use digital alternatives for many payment use cases, including:

• Premium Refunds and Rebates. Insurers may have to provide refunds when policies are terminated early, but we’ve seen that this isn’t the only time policyholders may be owed money back. COVID was an unprecedented situation, and hopefully, we won’t get a repeat of it any time soon. Nevertheless, the difficulties experienced during the pandemic have shown that insurers need to be ready to issue refunds. These types of payments can be processed efficiently and almost instantly using digital payment tools.
• Agent Commissions, Bonuses, and Incentives. Many workers receive their paychecks through direct deposit. Why not pay agent commissions digitally as well? Faster, easier commission, bonus and incentive payments could be a recruiting differentiator and a reason for independent agents to place business with you instead of your competitor.
• Usage-Based Insurance (UBI) Premium Refunds. While UBI refunds are typically processed as a credit at renewal, there may be times when a refund payment needs to be processed – particularly in non-renewal circumstances. The process is so much easier to manage digitally.

Creating a Win-Win with an Omnichannel Payment Experience

The volume of digital payment options has exploded in recent years. Providing multiple options is the only way to make sure you’re covering your payment recipient’s preferred method and channel. Insurers already know that inbound digital premium payment options can improve policyholder and agent experiences – thereby hiking satisfaction and retention rates – while also reducing the occurrence of late or forgotten payments. Outbound digital disbursements offer similar benefits including speed, convenience, security, and cost savings – no matter the volume or frequency. Your policyholders and agents will have control over how they’d like to be paid and will be delighted with rapid access to funds. 

One Inc Transforms Payment Burdens into Opportunities

One Inc Premium Refunds and Commission Payments enable carriers to deliver digital disbursements with speed, convenience, and security - no matter the volume or frequency. Say goodbye to all of the uncertainty, intensive management, and excessive costs associated with physical checks. Your customers and agents will have control over how they’d like to be paid and will be delighted with rapid access to funds. Delivering a greatly improved experience helps carriers experience better client retention and keeps agents happy too.

With One Inc, you can deliver a frictionless payment experience – all from a single platform. Why wait another day to learn more? Talk to sales or schedule a customized demo.

Sources:
¹ https://www.insurancejournal.com/news/national/2021/06/18/619074.htm
² https://www.jdpower.com/business/press-releases/2021-us-auto-insurance-study
³ https://www.propertycasualty360.com/2020/10/06/a-look-at-auto-insurers-responses-to-the-first-covid-19-wave/
⁴ https://www.caranddriver.com/news/a35020026/car-insurance-refund-coronavirus-disappointing/