Insurance payment transformation

How insurers can radically improve operating efficiency and customer experience

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  • Insight
  • 5 minute read

A small thought experiment: Think of how you, as a consumer, paid for products and services five years ago. Feels slow and complicated, doesn’t it? Now consider how it works today. Feels a lot smoother, more enjoyable, even. It is literally easier to spend money today than it has ever been. Customers are better informed, more demanding and expect a seamless journey across and between different channels, leading companies across various industries to respond with payment innovation and transformation. So why then are insurers so slow to respond?

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Our insurance expert Bernhard Schneider on the Conversations on the Creek podcast

Some financial services companies have realised that interactions such as billing and claims payments are such a great way to create a positive customer experience and brand loyalty, that they have built entire customer engagement strategies based on payment transformation. These efforts have been facilitated by ongoing investment in technology, enabling the underlying processes to be fully automated and digitised, making it possible to build robust, secure and compliant end-to-end payment solutions.

And yet only a select few insurance companies have so far chosen this route. For insurers it is challenging to benefit from the full spectrum of added value that a payment transformation unlocks. A reason for this is that payments impact multiple areas of the insurance business model, areas that operate to a greater or lesser extent in silos. Further obstacles are a lack of knowledge about best-in-class payment solutions and limitation of understanding the broad range of payments caused by a purely functional CFO perspective. Insurers must grasp the bigger organisational picture of how radically payment transformation can enhance both your customers’ experience and your operational efficiency.

How to transform your payments

The good news is that the tools, approaches and resources are available to enable insurance companies to make a start. Further good news is the sheer scale of the opportunity that payment transformation represents.

If this sounds interesting to you as an insurer, a good place to begin is to look at where, and how rationalising your payment infrastructure could improve your existing operating model. Take a step back. Briefly put yourself in your customer’s shoes and see how frustrating it can be if payment systems don’t mesh, and how much more pleasant it would be for customers if you offered them easy-to-use, end-to-end payment solutions.

The next useful step is to quantify the future benefits and types of savings that you could unlock by optimising your payment architecture and processes. It’s simple arithmetic, but you’ll be pleasantly surprised how much is to be gained.

Also, look to adopt total cost of ownership (TCO) as the lens through which you view your entire payment landscape. Mapping the end-to-end activities, systems, processes and costs associated throughout the entire payment life cycle is a crucial starting point in developing a payment transformation roadmap. Most importantly, it will give you an informed view of your true total payment costs and volumes and enable you to use cost per transaction as a core operational (and strategic) KPI – something that marks out insurers who are already harnessing payment transformation to their advantage.

What can you do?

To make the process of payment transformation more tangible and manageable for insurance companies, we at PwC have partnered with system provider Duck Creek Technologies to create a number of use cases. Each case is structured to show how a TCO view of the payment life cycle can be used to develop transformation initiatives relating to operations (addressing direct debit failures), customer experience (addressing claims payout with brokers), and partnerships (unlocking network effect by providing payout optionality).

You can read more about these in our white paper. In each case we describe the problem that can be solved, the solutions available to do so, and the factors that should also be considered if you choose this particular route. We also give examples of the concrete financial benefits.

One of the main goals in creating these use cases was to ease the payment transformation journey by addressing two problems we’ve observed in our work with insurance companies: they severely underestimate the complexity involved, and they underestimate the true total cost of ownership. A single payment provider connection may seem simple, but the project has to be approached with intelligence and realistic expectations.

Seize the opportunity

Investing in your payment infrastructure offers incredible opportunities for you to exceed customer expectations, reduce costs in the short and long term, as well as differentiate yourself in an increasingly digitalised and service-based marketplace.

The key to seizing these opportunities lies in careful planning (accounting for the full breadth and depth of payments involved in your existing operating model, including view on TCO), selecting two or three business use cases where enhancing payments could substantially boost customer engagement or your operational processes, and executing by creating a cross-functional team.

If you’d like to learn more about the opportunities and challenges of payment transformation for you as an insurer, download our white paper or reach out to us to talk about your specific situation and needs.

Download the white paper

Learn more about about opportunities to create a competitive edge by thinking differently about your payment infrastructure.

Contact us

Jörg Thews

Partner, Swiss Insurance Leader, Zurich , PwC Switzerland

+41 58 792 26 35


Bernhard Schneider

Director, Advisory, PwC Switzerland

+41 58 792 12 07


Benjamin Nikzad

Manager, Advisory, PwC Switzerland

+41 58 792 28 12