Insurance reimagined: Clearcover’s smart payments evolution

Challenge 1: Delivering a frictionless customer experience

Born from a digital-first customer experience, Clearcover has from day one had clear ambitions to ensure an efficient operating model to pass on savings to its customers. A key part of this strategy is ensuring the customer experience is as frictionless as possible at crucial points, including:

1. Purchasing a policy and setting up a recurring or once off payment method

2. The ability for customers to retrieve their insurance card or access their policy easily

3. Be there with a great claims experience when it is needed

Clearly, an important aspect is the initial payment set up, and ongoing billing. Research tells us that insurance companies don’t have the best track record when it comes to capturing billing information and the ability to connect to update payment details, but this is critical when an insurance policy validity is on the line. 

Adam Fischer, Chief Digital Product and Innovation Officer at Clearcover, highlights changing consumer behavior when it comes to insurance, “The advent of the smartphone has really changed overall customer behavior and what they expect out of their insurance carrier. There's an expectation that most or all interactions can be done digitally, and that those digital interactions are done with a great user experience - they're easy, seamless, and quick.”

As Clearcover scaled, it became clear that its initial technology strategy may not be able to sustain the long-term growth needed for the business. Like many insurance providers, a core component was their policy administration system (PAS), and also closely related - the payments funnel. From the outset, Clearcover sought a provider that could deliver bundled services (PAS and payments), low implementation costs and quick upstart; but it became evident they needed more internal control over these systems as they grew. 

Challenge 2: Maximizing payment efficiency for operational success

Clearcover recognized how critical a flexible, reliable and scalable PAS was in delivering a seamless customer experience so, they built it in house. Fischer notes, “We knew our future plan was to build our own custom policy administration system, and we thought, if we are going to build a best-in-class technology we need a best-in-class payments provider to match.” Finding a payments partner that works in-step with their in-house technology, finds efficiencies along the way, and supports Clearcover’s ambition as they scale, was paramount in the vendor search. “At the end of the day, if you have a more efficient business, you can take those savings and turn it into premium savings for a customer.”

Challenges:

• Deliver on their mission of seamless customer journeys as they grow and expand into new verticals/products/channels,

• Scale their technology, specifically their payments funnel, to utilize data more efficiently, and, ultimately lower the cost of payments in the business,

• Find a partner with a single technology stack, or technology developed in house, and culturally aligned with Clearcover’s values as much as possible

With Adyen’s technology stack managed and created in-house, it provided Clearcover with control, flexibility and scalability, whilst delivering lower operational costs - all through one global platform. Fischer notes that payment processing costs may seem obvious but there are a lot of hidden aspects - maintaining systems, engineering time, downtime and so on. “For us, because cost is such an important part of our business, when we partnered with Adyen, we knew we were partnering with a digitally centric stack built-from-scratch payment provider that is able to eliminate a lot of waste out of the entire payments process, which is very aligned with what Clearcover does from an insurance perspective”. Highlighting that a PSP investment is not only in a technology platform but also one that provides the heavy lifting for merchant payment and engineering teams.

Once Clearcover was onboard, Adyen was quick to identify optimizations to rollout - specifically tackling using their advanced data capabilities to identify a highly customized retry logic for plan for failed transactions, a major pain point for the recurring billing based business. Adyen worked closely with Clearcover to develop a payments strategy fit for the insurance industry and customer profile, which drastically increased authorization rates by about 20% since the partnership began in 2021. And not only that, as the auto insurance industry as a whole felt margin pressures due to a hyper-inflational environment, retention became more critical than ever. Adyen’s guidance and easy-to-integrate solutions not only delivered a real business benefit but more importantly, meant that less customers faced billing issues in the process. 

Network Token Optimization (NTO) was a key part of rethinking Clearcover’s payments strategy and a large contributor to a further increase in authorization rates in the last year. NTO ensures efficiency and security of online payments by minimizing sensitive cardholder data, and delivers two key benefits. Firstly, and most importantly for Clearcover, NTO provides a frictionless customer experience by allowing for smoother checkouts, peace of mind from secure transactions, and hassle-free updates when card numbers change. Secondly, without storing sensitive card data, Clearcover minimizes its risk of accessing sensitive data - a key consideration for online-only business. 

Fischer notes that security is a priority in its quest to deliver a best-in-class customer experience. “Customers trust you with their payment information and they expect that you have chosen a vendor who takes security very seriously. And in our experience, that was clear from day one. I don't think you get the privilege of being able to handle over a trillion dollars of payment information without security being weaved throughout your entire technology stack”.

With many insurance payments relying on debit card transactions, routing these through the least-cost network was a quick and efficient way to deliver immediate savings in the payment funnel. Through Adyen’s intelligent payment routing for US debit, Clearcover was able to significantly reduce interchange fees by leveraging machine learning to automatically select the most cost effective network for each transaction, at speed and scale. In just the last six months alone, Clearcover saw cost savings of almost US$2 per transaction, an almost 66% cost reduction for each debit transaction, all alongside improved payment approval rates. And with thousands of transactions passing through the business, this translated into nearly US$10,000 worth of savings every month, with that number climbing as the company grows.  

Combined with a drive to deliver a best-in-class payments experience, Clearcover notes that a true partner like Adyen, is always looking for ways to improve their business at every turn.  “[Adyen] is always looking for how we could A, serve our customers the best, and B, stay true to our desire to offer the lowest cost to our customers by helping us to find ways to save. And that's not normal for a lot of vendors. But that's because Adyen is not looking for the next year or two, they're looking for the next ten years, and it's very refreshing to have that in a vendor.”

"Not only are you getting the technology, but you're also getting the expertise to help you figure out where you need to go."

Adam Fischer

Chief Digital Product and Innovation Officer at Clearcover

With Pay by Link currently in the works, allowing customer service teams to quickly, easily and securely collect payments, Fischer notes how Adyen’s partnership was so integral to the success of the rollout with an extensive pre-launch whiteboarding session.“It could be very easy for a vendor to just say, well, just go look at our API docs and you'll figure it out, but that's not the level of support that Adyen provides. Instead, they said, ‘Why don't we fly to Chicago? We'll lock ourselves in a room for a couple of days and we'll figure out how to best serve your (Clearcover’s) customers.’ And so not only are you getting the technology, but you're also getting the expertise to help you figure out where you need to go.“

Clearcover has big plans to be a leader in digital insurance, and in some ways, they already are - offering a seamless customer experience, efficient claims processing, and competitive pricing. But reimagining insurance isn’t just about the digital experience, it’s about fundamentally rethinking the status quo at every customer touchpoint - including payments.

By prioritizing operational efficiency in its partnership with Adyen, Clearcover has transformed what was once a traditionally cumbersome process into a seamless experience. Their success underscores a core truth - in the digital age, payments are not just transactional, they’re a crucial component in the overall customer experience.

Adrian Davis believes that “this partnership serves as a powerful example of how strategic investment in payment technology can drive both customer satisfaction and significant bottom-line results, setting a new standard for the insurance industry and beyond. We’re excited to see Clearcover’s ambition brought to life, supported by Adyen’s technology.”