In the world of insurance, where uncertainty often looms, a sense of stability and predictability can bring immense comfort. Policyholders want to be protected at all times, never taking any risks. In order to ensure that each insured person doesn’t miss any payments and as a result finds themselves without cover, it’s crucial to take measures that prevent these situations from occuring. Here’s where recurring payments come into play – a solution that not only simplifies the financial aspect of insurance but also offers policyholders significant peace of mind. On another hand, recurring payments are also a godsend for insurance companies as their processes and follow-ups become much more simplified and reduced in volume.
In this article, we take a look at the benefits of recurring payments for insurance companies and policyholders and explain how to implement them into your strategy.
Would you like to find out more about recurring payments for insurance companies? Head to our blog post about direct debit for insurance and learn about all the advantages it brings.
Monthly premium payments: more accurate budgeting and financial planning
Picture this: you're an insurance policyholder trying to manage a lump-sum premium payment that strains your budget every year. The months leading up to the payment are always stressful as you try to save up here and there to ensure you don’t find yourself with an empty bank account after paying your insurance premium. This is what most of your clients who pay annual insurance premiums go through.
With recurring payments, however, policyholders gain the upper hand in their financial planning. These automated, regular payments allow clients to spread the cost evenly throughout the year, giving them a clear picture of their expenses and enabling them to allocate funds more efficiently.
How does it affect you as an insurance company?
Recurring premium payments offer insurance companies a steady cash flow since regular income comes in every month. Instead of receiving numerous large sums in some months, while other months may be less fruitful, you receive a similar amount of money every month. This significantly improves the cash flow and allows insurance companies to make well-informed decisions in terms of expenditure and investments.
Reduced risk of lapses: how recurring payments for insurance companies improve retention rates
Insurance lapses can have dire consequences, leaving clients vulnerable and unprotected precisely when they need coverage the most. Recurring payments act as their safety net, drastically reducing the risk of unintentional lapses. By offering clients automatic premium payments, you improve payment rates and bid farewell to those unintentional lapses and cancelled insurance policies, and automatically increase customer lifetime value since policyholders are more likely to stay with your company for longer.
Besides, it’s also a great advantage for clients who no longer have to worry about missing due dates and potential interruptions in their coverage.
"Recurring payments redefine convenience for clients while elevating payment rates for insurers. They're more than transactions – they cultivate lasting partnerships, increasing customer lifetime value. With each payment, we're reshaping the insurance landscape, forging stronger connections."
- Christian Ivarsson, Head of Sales at Waytobill.
Streamline payment processes and eliminate manual transactions for clients
The XXI-century customer is way over marking calendars and setting reminders for premium due dates. With the digitalisation of all aspects of our lives, automatic payments are the must-have clients look for when contracting new services or, in this case, insurance policies. Thanks to policy premiums being automatically withdrawn from clients’ bank accounts, you totally eliminate the need for manual transactions on your client’s side, providing a better customer experience and overall satisfaction (both have a great impact on customer retention).
When working with automatic premium withdrawals, insurance companies reduce the workload for their administrative staff and let them focus on more important tasks, since there is no need to manually count cash or cross-check the incoming bank transfers with due payments. Instead, recurring payment methods are normally integrated with insurance companies’ sales or CRM systems, making payment tracking straightforward.
If you’re looking for effective payment solutions for insurance companies, look no further! At Waytobill, we offer recurring payment methods that have proven to be seamless, straightforward, and intuitive for insurance customers. Find out more about Waytobill’s recurring payment solutions for insurance companies or contact us!
