Payment Solutions for Insurance Companies: Why Switch to Direct Debit

Payment Solutions for Insurance Companies: Why Switch to Direct Debit

Discover why direct debit is the go-to digital payment solution for insurance companies and learn how it can help you improve customer lifetime value.

Are you looking to maximise efficiency and increase customer lifetime value for your insurance company? Adopting automatic recurring payments into your insurance company operations may be the solution you’ve been looking for for a while! By offering flexible and convenient periodic payment options, you can avoid late or missed payments from policyholders and therefore lower involuntary churn. Apart from improving results for your company, recurring payments can also help you provide an improved customer experience – and all these aspects lead to the overall success of your organisation.

Like any business, insurance companies aim to generate profits and reach financial stability that allows them to pay out claims in a timely manner, tackle unexpected events or economic downturns, and also cover general monthly expenses. Well-managed cash flow is a fundamental aspect of any insurance company’s health and ability to serve policyholders. A seamless payment handling is an important aspect, especially for large policy providers that manage hundreds or thousands of policies. 

In this blog post, we take a look at how insurance companies can leverage direct debit to streamline processes and achieve better results.


Recurring payment methods for insurance companies in the Nordics

Nordic insurance companies have been operating with recurring payment methods for quite some time but in most cases, these payment methods are not entirely digital. 

Monthly, quarterly, or yearly invoices are considered a recurring payment method, as the invoice is automatically generated and sent to customers for payment. But apart from generating additional costs on printing and shipping, invoices often bring more hidden costs and hassle for customers. Pending invoices often slip customers’ minds, leading to missed or late payments, suspension in policy coverage, and involuntary churn, which negatively impacts customer satisfaction. 

By switching to direct debit, insurance companies can provide a much more seamless and hassle-free experience and ensure that all insurance premiums are paid on time. And while signing up for direct debit is often associated with lengthy forms, at Waytobill we have digitalised the whole process. Over the next few sections, we will take you through how your insurance company can benefit from switching from invoice to local direct debit payments in Nordics. 

➡️ Learn how to use QR codes to transition invoice clients to direct debit.


Benefits of switching to direct debit for insurance companies

  1. Increasing the customer lifetime value
  2. Streamlined premium management for your insurance company with automated billing and collections
  3. Direct debit improves customer experience for policyholders
  4. More efficient cash flow management

Adopting recurring payment solutions can help insurance companies maximise efficiency and boost results in a variety of different ways:


1. Increasing customer lifetime value with direct debit

By enabling various payment options, customers receive the flexibility necessary for their satisfaction. Customers who can choose from among different payment methods and opt for their preferred way of payment, for example, direct debit, report higher levels of satisfaction and are more loyal to the insurance provider or broker since they don’t need to take any further action to continue paying their insurance premiums and stay protected. Offering direct debit as a payment option can not only maximise efficiency for insurance companies but also improve customer relationships and increase customer lifetime value by as much as 50%

Manual payments often lead to errors and late payments which simply slip the mind of customers. These lead to coverage suspension or cancellations in some cases. Direct debit minimises payment inaccuracies and improves billing transparency. Local direct debit, for example, Digital Autogiro, allows customers (and companies) to completely forget about missed or late payments because… they no longer happen! 


2. Streamlined premium management for your insurance company with automated billing and collections

Direct debit has been gaining popularity over the years, bringing convenience to customers and peace of mind to the payees. When offering Digital Autogiro or AvtaleGiro, customers sign a contract or agreement and set up regular monthly, quarterly, or yearly payments which require no further action from either party. This significantly reduces the workload for administrative and finance teams no longer having to manually handle payments, generate invoices, and follow up on late insurance premiums. Additionally, direct debit eliminates errors commonly encountered when manually processing payments, for example, incorrectly introduced data or inaccurate amounts, which lead to the payment management process taking longer than forecasted. 


3. Direct debit improves customer experience for policyholders

Customers want convenience–and rightly so. According to Analytic Steps, convenience is one of the main factors when it comes to choosing what products to buy and which solutions to opt for. Therefore, offering recurring and flexible payment options is one of the major aspects when it comes to providing a quality customer experience.

By giving customers the option to choose direct debit you offer them convenience and peace of mind of knowing that they won’t miss a payment or have their coverage suspended. Besides, customers don’t have to send cheques, or cash or remember to make online payments or transfers, which increases their satisfaction and helps your organisation easily manage the cash flow. Happy customers are loyal customers!


4. More efficient cash flow management

Consistent and predictable revenue streams provide insurance companies with peace of mind and stress-free management of cash flows. 

Allowing customers to pay their insurance premium in smaller recurring instalments, rather than making single large payments, gives insurance providers the comfort of having a regular and punctual income coming in every month. When dealing with yearly invoices, which used to be a standard approach for insurance companies, they experience a high cash flow in some months, while in others their income could be negligible. Direct debit allows for optimised cash flow forecasting and planning, enabling companies to make well-informed spending or investment decisions and lower costs associated with money borrowing. 


Local Nordic direct debit solutions for insurance companies and brokers

In today’s highly competitive market, insurance companies can step up their game by offering flexible payment methods, and stay relevant and ahead of the competition. If you’re tired of dealing with the hassles of traditional and manual payment methods, it’s time to consider implementing direct debit. 

But how do you choose the right payment solution provider for your insurance company?

Keep an eye out for companies that offer reliable and secure solutions, with a proven track record of working with insurance companies, especially if you’re a large policy provider. At Waytobill, we digitalised the direct debit sign-up processes and changed lengthy forms into intuitive online checkouts that require just a few clicks to finish the registration and onboarding process.

Besides, at Waytobill, we specialise in seamless payment solutions that cater to businesses of all sizes. Our reliable checkout and billing tools have been trusted by influential players in the charitable, membership, and insurance sectors, allowing us a competitive edge through valuable experience. We are integrated with various CRM systems, empowering companies to maintain complete control over their customers’ journeys and payments.

Waytobill’s payment system is highly secure and fully compliant with regulatory and data protection requirements. 


Are you ready to increase customer lifetime value and loyalty for your insurance company? Contact us today and let our team explain how you can take full control of your cash flow! 

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