Published by PaymentsSource
Businesses don’t wake up every day hoping they can write more checks, says J. Christopher Ward, EVP, Head of Treasury Management Product Management and Operations at PNC. Across the corporate world, treasury managers are struggling to streamline their payment processes while improving their client experience. Nowhere is that sense of urgency greater than in the insurance industry, he adds.
Consider this scenario: Unfortunately, high winds damage the roof on your house. The insurance adjuster comes out, estimates the damage at $10,000 and tells you the check’s in the mail. In the meantime, you need to hire a contractor as quickly as possible to get the roof fixed so you can clean up the rest of the damage and move back into your home.
Compare that to an adjuster who initiates that payment with a text, and your $10,000 is in your bank account five minutes later when both the sender and the recipient are enrolled in the service. “That’s a completely different customer experience,” Ward says.
It’s a completely different business experience, too. With digital disbursement you’ve eliminated the back-office work involved in processing the adjuster’s report, cutting the check, and getting it to the customer who probably isn’t living at the address on record because of the damage. Then you have to reconcile that check once it’s cleared.
Those are just a few of the benefits that SECURA Insurance Companies are already seeing since instituting a digital disbursement system through PNC and the Zelle Network,® says Jana Janssen, SECURA’s manager of treasury. “We see this as a differentiator for us,” she says. “We’re leveraging this solution from our bank to get away from check writing and into faster payments.”
Meeting a Mandate
SECURA’s transition to e-payments started with a mandate from the state of Minnesota. The state announced in 2015 that all workers’ compensation recipients should have the option of being paid with an electronic funds transfer (EFT) starting in January 2016. SECURA’s dated payment system was only set up to process checks, so the company reached out to its bank, PNC, for guidance. That’s when SECURA first heard about disbursements with Zelle.®
SECURA recognized immediately that real-time payments were going to be the future of the disbursements industry. The decision was made to rebuild SECURA’s payment system to plug into PNC’s new system. It was going to be a longer, more involved process than simply setting up a more traditional automated clearing house (ACH) system, and the long-term benefits outweighed any short-term issues. “We knew that as we grew as an organization, we wanted to think about the ways people wanted to be paid, not the way we wanted to pay them,” Janssen says.
When the Minnesota mandate went into effect, only four workers’ comp recipients signed up for EFT, so Janssen handled those manually while her team worked with PNC to get the technology infrastructure in place. Then she worked closely with SECURA’s claims adjusters to make sure they had all the resources and education they needed to promote this new service. “The claims adjusters are really the frontline for us, so they needed to understand it and sell it,” Janssen says. “We took a year rolling it out to make sure everyone was comfortable.”
The next hurdle was educating consumers once the service was launched. SECURA actively marketed the service to claimants with recurring workers’ comp payments. A few customers, primarily millennials who were already familiar with digital payments, were eager to enroll. Most of the recipients, though, had their doubts. “The claimants understood direct deposits, but when we said all we needed was their email address to pay them, they didn’t understand how it was going to work,” Janssen says.
Eventually, most of the workers’ comp recipients saw the advantage of switching to digital payments. Throughout the process, though, Janssen and her team stayed in close contact with the claims department, gathering feedback from customers and explaining the system to new enrollees.
A Company-Wide Rollout
Riding on the success of the workers’ comp experience, SECURA is now providing digital disbursement payment options throughout its B2C payment operations. Janssen estimates that digital payments make up between 3% and 5% of its disbursements today, but the goal is to eventually get that number up to 25% to 30%.