Payments are the veins of the insurance industry, supplying each part of the complex ecosystem with a critical lifeline. As with the human body, the insurance industry does not solely rely on one organ to function but efficiently distributes core processes over multiple specialised parts. For the insurance industry, these include policyholders, insurance intermediaries, managing agents, claims adjusters and insurers among others. Each of those entities need to be supplied with quick and accurate payments to function properly.

Generally, there are two main payment flows in the insurance industry — premium and claims payments. All other forms of transfers are a branch of these two. In a way, this works similar to arteries and side veins in the human body. Hence, it is most important that the two main payment flows ensure a strong and efficient provision of the ecosystem and all side branches.

Over the last years, significant improvements have been achieved in the speed and accuracy of claims payments. Through efficient claims capturing, dedicated loss funds and automated payment releases the throughput of the claims payment stream was significantly improved. Since that stream has a direct impact on the policyholder, the industry was happy to heavily invest into digitisation in this space. The results are already visible and will only materialise further over the coming years.

The other main payment stream has not seen as much attention as its customer-facing counterpart. Premium payments are slow to flow through the ecosystem and remain comparably opaque. While digitisation is slowly helping to make policyholder’s payments easier, that process is not continued throughout the insurance value chain. Isolated, legacy systems and manual processes paired with a fragmented distribution clog up that very important stream. In an almost selfless fashion, insurance market entities neglect their outstanding payments for the benefit of writing business and paying claims. While the reason behind these actions is clear, it leaves one of the three main areas of insurance underserviced.

Implementing an effective and scalable premium payment solution for the insurance ecosystem can, hence, unlock vast efficiencies. On a high level these include:

• Improved working capital efficiency

• Improved visibility and transparency

• Improved operational efficiency

• Reduced accounting errors

• Reduced payment fraud

For a successful implementation, systems need to be created which have a material impact on the problem but ensure a smooth and effortless integration process.

We at Diesta live for insurance premium payments. We are on a mission to reduce the amount of insurance payment processing time — ideally to 0! Our vision is to create an insurance marketplace which has more time to focus on writing business and paying claims while making sure to take full advantage of the potential of premium payments.

We’re delighted to continue the conversation online or offline. What are your experiences in this space? What are the main problems and what interesting solutions do you see developing?

Please reach out to julian@diesta.co.uk or consult our website www.diesta.co.uk.