John Knotek—CEO, ClearPay
The insurance industry is accustomed to responding to unforeseen events and crisis with poise and diligence. The last few months working through COVID is no exception.
Carriers and brokers alike responded to best meet the needs of their mutual customer base. Despite being declared an essential service, many in the industry responded by enabling their employees to work from home. Many carriers and brokers I spoke with at the time were very proud (and rightly so) of how quickly they were able to move almost entire teams to work–from–home environments to both protect their staff and help stem further spread of the virus.
But it wasn’t 100% of employees. There was a small percentage (one carrier quoted 3%) that were still going into the office. Was it technology limitations preventing 100% working from home? Not entirely—the people left trucking to the office at the height of COVID cases increasing were individuals dealing with cheques.
Cheques were a key contributor in preventing full remote enablement of the insurance workforce. This highlighted yet another (unforeseen) shortcoming of this form of payment. If there ever was a more human motivation for change, this was it.
Not surprisingly, many carriers and brokers expedited long anticipated plans to move to cheque alternatives. This included longstanding policies of carriers to only accept cheques from brokers and brokers seeking alternatives to collect funds from policyholders. Were these transitions hard? Generally, no. It was simply the added motivation to move plans of getting rid of cheques to the top of the to–do list.
While I’d like to think there are very few entities out there that have plead their unwavering dedication to cheques, the prioritization of eliminating them for incoming collections, paying carriers or paying claims kept moving to the bottom of the list. Hey it works, why change?
While we’d never anticipated a pandemic to be a driver for advancing industry payments, we at ClearPay were pleased to help make this change for our partners. More brokers were able to issue payments and reporting from their living rooms and more carriers were able to use email money transfers for claim payments.
This experience certainly puts things into perspective and brokerages and carriers alike should continue to look at how they get paid and how they make payments. At its very core, the insurance industry is about moving money—collecting premiums, paying commissions, expenses and claims, and investing funds. How money moves needs to change. The motivation is real! And the impacts are broad. Cast any pre–conceived assumptions about money movement aside and start fresh. There are lots of changes in the payments world that have taken place and are coming soon.
A few to consider:
Auto-deposit for Interac eTransfer—get registered with your bank. It’s free. Policyholders can now send money without manual handling or dealing with security questions and answers.
Credit Card Merchant Accounts—you can accept credit cards and not pay any fees (it’s true!)
Paying Carriers—your BMS is now an accounts payable application machine. Enter a payment into the BMS and everything afterwards is automated.
Claim Payments—cheques are a problem. There are viable alternatives. I’d love to chat with you about them.
When it comes to dealing with payments, don’t be the last one standing holding that chequebook. Your clients and staff will thank you for it.