Payment technology: giving claims a smoother journey


John Sharman at Tuxedo Money Solutions explains how a streamlined payment process could benefit the claimant and insurer alike, all while enhancing a travel agent’s revenue stream

Advancements in the payments arena have meant that historically antiquated processes such as insurance claims now have the opportunity to become modernised.

Travel insurance in particular has long been a grey area in terms of both holidaymakers’ understanding of the need for such cover, and also the process of making a claim – if required. It is an area that would benefit from a more innovative payment solution, particularly in terms of addressing the various ways in which people may need to access money, and how immediately, in real emergency scenarios.

Statistics from ABTA show that 48% of people don’t understand the seriousness of travelling abroad without cover should an accident occur and that 78% of these travellers wouldn’t have the £10,000 required to pay for their medical bills if they had to. Yet even for those holidaymakers that take travel insurance, in the worst case scenarios, time delays in claims could leave them in an emergency situation with no access to cover.

It is possible that travellers with serious injuries could be denied treatment abroad while they wait for insurance money to come through, leaving a sour taste in the mouth of those who bothered to take out insurance and a less than perfect customer experience – at a time when they need it most.

Following the lead of other industries that have looked to innovative payment solutions to enhance their offering to customers, some trailblazing insurance companies are beginning to switch their payment methods from paper to plastic and embracing the assault of prepaid payment methods much loved and adopted by the travel and retail industries.

By partnering with a prepaid currency card provider, insurance companies can provide a faster and more convenient procedure for customers, while insuring peace of mind that if the need to make a claim arises, outstanding costs can be instantly taken care of.

Prepaid payment solutions can offer a payment enabled insurance policy card with a unique PIN that can be securely loaded with the exact claim amount if any unfortunate incidents occur that warrant a claim. Similar to a debit card, the card can also be used for general holiday spend, withdrawing cash at ATMs, in-store to make purchases, and also for cashback rewards.

Prepaid cards allow claimants to access their money faster, as they aren’t required to go into bank or deposit payments, especially for those smaller claims. Sure to create a better customer experience, the use of this instant and immediate reimbursement solution will mean a happier customer and a more streamlined internal process.

Insurers can monitor and control the exact amount loaded to cards as well as easily reconcile payments with individual cards. Faster payouts could be made for smaller claims, and in emergencies payouts could be loaded on to cards on the same day to eliminate the need for travellers to cover the costs in real time and claim back later. With medical bills abroad amounting to thousands, paying up front is impossible for most.

In the case of very complex claims, a prepaid card offers an accessibility to cash for various costs whereas the previous model would require individual claims to be made and then various stages of approval before a payment could be made. Prepaid solutions have been making waves in the foreign exchange and retail industries for some years now, but increasingly the travel sector and supporting industries are beginning to realise the flexible benefits associated with such a simple-yet-effective method of payment.

For agents themselves, the pressure of ever depleting revenue streams could be alleviated by offering a solution at the time of booking, which allows holidaymakers a simpler experience in the event of an emergency. The way in which we pay and want to be paid is ever evolving. No longer an emerging payment solution, but one that has emerged and has proven its worth, it won’t be too long until other industries catch up and validate prepaid’s claims.


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