4 Billing and Payment Red Flags Your Insurance Customers Don’t Want to See

As one of the only touchpoints between insurance companies and their customers, the billing and payment process is at the center of the customer experience (CX). A reliance on legacy systems, loyalty to paper documents, and limited payment options have resulted in a less-than-optimal experience for insureds. In 2022, we conducted a survey on billing and payment trends in the insurance industry to understand insureds' challenges when interacting with insurers. A key takeaway from this research was that 46% of those surveyed stated that CX was a top factor when selecting an insurance provider, but insurers struggled to meet customer expectations. To help insurers appreciate current customer expectations, we’ve identified four red flags that have the most significant impact on customer experience for insureds.

Red Flag #1: Little or No Communication

The first red flag when interacting with insurers was a need for more communication. This is a big beef with insureds. A whopping 42% identified little or no communication with their insurance company as a major challenge. Unfortunately, complex and difficult-to-understand policies are common and the nature of the insurance industry. This compromises trust because customers often don’t understand their coverage or what they’re paying for. The key to solving this is opening the lines of communication. An abundance of channels can be leveraged to increase communication between insurance agencies and their insureds. These platforms can even empower insureds to self-manage their preferred notification type, channel, and frequency.

Red Flag #2: Difficulty Securing Their Data

The second biggest challenge for 18% of insureds was securing data. In a 2021 KPMG Report on “Corporate data responsibility: Bridging the consumer trust gap,” 40% of consumers say they don’t trust companies to use their data ethically. This is where PCI compliance and stateless tokenization can provide the security insureds seek. Ensuring a PCI-compliant environment for accepting payments, whether online or in a call center, assures customers their transactions are secure.

Red Flag #3: Slow Payment Processing

According to our report, 17% of insureds felt that slow payment processing was another major challenge. Meeting insureds’ expectations isn’t possible if you don’t know what they want. When it comes to payment processing 27% of consumers expect their insurance payments to be processed instantly, and 39% expect it the same day. If your insurance organization is working with a billing and payment provider that takes 2-3 days or up to a week to process payments, this is a red flag for your customers.

Red Flag #4: Lack of Digital Capabilities

The fourth challenge for 14% of insureds was a lack of digital capabilities. A clear path for insurers to improve their relationship with existing insureds or members and even gain more customers is focusing on digital channels for statement delivery, payments, and communications. The upside is significant. 53% of respondents stated that improving digital payments for their insurance services would increase their overall satisfaction with their insurer. A further 35% shared that it would show that their insurer is innovative. But the benefits don’t stop at the customer level. Almost 50% indicated that improving digital payments would help them make payments on time. A clear win-win for both insurers and insureds.

Creating an Engaging Billing and Payment Experience

Customer demands are at historical highs, increasing the urgency for insurers to understand the expectations of their insureds and members and find solutions to meet them. Since the billing and payment experience is such an important touchpoint, offering innovative ways to pay and communicate is a must. This will allow insurers to increase customer satisfaction which will help them stay ahead of their competitors and attract and retain customers.

Source: KUBRA Insured Billing and Payment Report 2022.