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Seeking to improve the customer experience for insurance-claim payments, Metromile Enterprise Solutions LLC, an automated insurance-claims payments platform, is partnering with payment processor Dwolla Inc. to enable digital payments.
With the Dwolla integration, insurance companies using Metromile’s Streamline platform can send claims payments in real time using The Clearing House Payment Co.’s RTP Network. Other methods through Dwolla include the automated clearing house network and push-to-debit disbursements. In April, Dwolla released an application programming interface to enable real-time payments through the RTP network.
The addition of digital-payment capabilities is expected to enable insurance carriers to send payouts faster and at lower cost than paper checks. More than three out of four insurance claims are paid by paper check, which can lead to delays as long as seven or more days and transaction costs 10 times higher than with digital payments, according to Metromile. Additional costs from paper checks include the cost of cutting the check, postage, and tracking the check once it has been mailed.
“Insurance companies’ legacy systems [for claims payouts] are based on checks and ACH payments, so they are starting to see a need to transform their payment capabilities as nimbler players add digital-payment capabilities to their platform,” says Dave Glaser, president and chief operating officer at Dwolla. “Creating a better customer experience is what’s driving this trend.”
In addition to expected cost savings, the integration of Dwolla’s payment-processing capabilities into Metromile’s platform spares insurance carriers from having to connect directly to a processor, Dwolla says. “There is some IT capital spending savings,” Glaser adds.
Overall, improving the customer experience when it comes to claims payments could increase customer satisfaction and loyalty, according to Dwolla. “Policyholders are delighted by instant payments and insurance companies are starting to default to them,” Glaser says.
