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Top priorities for the insurance industry in 2024 and beyond

We’re shining a light on the key areas of focus insurance businesses should be prioritising, and how payments play a key role.

18 April, 2024
 ·  8 minutes
Woman sat on a chair using her phone

The world of insurance has evolved massively in the last few years alone. Gone are the days of long, arduous form-filling and complicated sign-up processes. Today, people can arrange coverage in just a few taps, or clicks, with the flexibility to amend a policy to fit a change of circumstances.

Amid the cost of living crisis, picking an insurer is dictated more so than ever by value for money and experience. People want to feel protected and reassured, without any hassle or hurdles while purchasing a policy, renewing, or making a claim. And with sectors such as retail offering embedded insurance with large purchases at the point of checkout, it’s crucial your payments process is as easy - while remaining secure.

With that in mind, we’re here to walk you through how you can strengthen your brand reputation and relationship with customers, and how payments play a key role in this.

1. Appeal to a new generation of insured

With other industries offering a speedy, streamlined service, consumers now expect that in all areas of their lives. This is especially true for Gen Z and Millenials, who are more likely to give up if the initial steps are too slow and complicated.

According to 2022 research,30% of UK consumersfeel they could manage their insurance policies exclusively online, showing a growing demand for digital in this space. To master this world, we recommend you focus on these two areas in particular:

Easy sign-up

Sign-up processes are make or break when it comes to taking out a policy. Customers expect to be able to whip out their phone and spend just a few minutes filling in their details. Many insurtechs offer app-based sign-ups, where they provide the quote before speeding people through purchasing.

A feature as simple as autofill is an effective way to whizz customers through traditionally time-consuming forms without losing them halfway. No one wants to enter their details over and over while researching quotes, and saving them precious minutes could make a world of difference in the decision they make.

Faster payments

It used to be the case that customers could only use certain types of payment methods to take out insurance, traditionally credit or debit cards. Times have changed, and with the younger generation preferring the likes ofdigital walletssuch asApple PayandGoogle Pay™you’re missing a trick if you exclude them.

Digital wallets store all relevant information needed to complete a transaction, meaning customers don’t need to pull out their card to enter details. And with built-in security features it means they make for a faster checkout as they are less likely to fail

Then there’sClick to Pay, built onEMVspecifications and supported by major card schemes, such as Visa and Mastercard. The payment process is the same, but instead of entering the card details manually, enrolled customers see their cards on screen, eliminating the need to manually enter card details at checkout. Adding it to your checkout allows you to tap into a large customer base and offer them safe and seamless payments.

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2. Reduce churn through all means

It’s one thing when a customer chooses to switch insurers, but it’s another when you lose them by accident. The percentage of loss due to non-payments can be high, but it’s something that is easily preventable if you have the right measures in place.

Having a payments service provider (PSP) that has tools to tackle this is a big plus. You can spend less time worrying about churn and more time focusing on other areas of your business. Tools you should be able to utilise are:

Real time account updater

This amazing feature automatically updates card details that are expired, lost or stolen, which prevents a payment from going through. This is done by checking Visa and Mastercard for updated details and instantly retrying if there has been an update. The best part? It’s all done in real time - no need to reach out to the customer.

In 2022 Adyen was the first platform to launch its Real Time Account Updater with Visa in Europe, under ourRevenueAcceleratesuite, having already offered it with other global card networks since 2017.

Auto retry

Many payment providers offer automatic retries on payments that fail due to technical errors. Since this takes place straight after the first decline, customers don’t need to re-enter their details and - like account updater - they do not know of any disruption to the payment. In Adyen’s case we only do this when there is a high chance of success, so your customers can secure their coverage and your revenue isn’t impacted.

Network tokenization optimisation

Major card networks, such as Visa, Mastercard and American Express, offer this service that replaces primary account numbers (PANs) - plus other sensitive data - with a token. Network Tokens stay the same while the network updates the card details, meaning uninterrupted billing for cardholders and less work for you. Because of the built-in security, issuers trust Network Tokens, so the likelihood of an accepted payment is higher when a Network Token is used.

They’re on the rise too; Visa confirmed last year that it surpassed 4.8 billion tokens - almost doubling from 2021. Though keep in mind you need the right tool that knows when to use either a token or the PAN, as without this the process may be sluggish due to issuers who are slower to adopt.

Adyen’s machine learning knows when to use network tokens and, if failed, automatically switches to the PAN to ensure authorisation. This means no awkward conversations with customers who are accidentally unprotected, causing friction and operational burden.

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3. Consolidate your processes

Insurance is already complicated; using multiple payment providers with separate systems for premiums and claims, makes operational processes difficult and reconciliation a headache.

When you unite all your processes within one place, applicable across business units, brands and regions, you open yourself up to more opportunity and less friction. Overhauling outdated systems and moving onto more modern tech will save you money in the long run while improving the overall customer experience. Adyen for example feeds all payments across regions, channels and systems into a single platform. With this, a company has a cohesive, detailed overview of its business while identifying areas of improvement or opportunity.

Not only will this digital acceleration increase productivity within your team, but with faster processes you can launch new products quicker and integrate new tech partners seamlessly. It may appear as a big investment, but in the long-run it will save you money fixing old systems. Just make sure you involve your IT department in the decision-making from the get go; having everyone - from customer experience to finance teams - on the same page, will ensure you stay agile and ahead of competition.

4. Stay on top of the regulatory landscape

As an insurer you’ll already know the regulations that apply in your field under thePrudential Regulation Authority (PRA)andFinancial Conduct Authority (FCA).

But there are others when it comes to payments which you must comply with. One of these is the Payment Services Directive (PSD2) in Europe. Set up to make payments safer and more secure across Europe, new compliance rules under this legislation were introduced in the UK in March 2022. If you operate or have offices in the EU, even if headquartered elsewhere, you must be compliant and provide stringentStrong Customer Authenticationfor customers. Machine learning can help here by examining each transaction to determine next steps rather than a manual setup.

3D Secure- under Strong Customer Authentication (SCA) - requires customers to provide two of three things: something they know (a password), something they own (a smartphone), and something they are (biometrics). This is all checked within seconds, ensuring a smooth and secure checkout.

Then there’s thePCI DSS, the Payment Card Industry Data Security Standard, which was developed by the PCI Security Standards Council (PCI SSC), an independent body made up of Mastercard, Visa, American Express, JCB, and Discover. Made up of six core principles, it's a set of technical and operational requirements intended to protect account data, combat fraud, and reduce the chances of a data breach. Broadly speaking, there are 12 compliance requirements, which you can read abouthere.

Pick the right partners for success

You can feel confident that all areas of your business are running like clockwork if you work with partners that share your goals and aspirations.

When picking the right PSP, looking beyond the obvious - processing payments - you want a partner that is there to provide what you need on a day-to-day basis. Around the clock technical support, a dedicated account manager and being kept up to speed with new areas of opportunity shouldn’t be taken for granted. These simple but impactful qualities are really the building blocks to success.

But with some providers, you can do so much more together. Adyen, for example, provides access to tools that prevent risk and boost revenue, with all products available through a single integration. And with all popular payment methods available out of the box, we’ll ensure you give your customers the freedom they desire.

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