# The evolution of insurance: what is left to be done Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-25 Category: INSURANCE Category URL: https://financedigest.com/category/insurance Meta Title: Revolutionising Insurance Payments: Enhancing Customer Meta Description: Discover how the insurance sector is enhancing core competencies, revolutionising operations, and embracing cutting-edge advancements for a seamless customer experience. URL: https://financedigest.com/the-evolution-of-insurance-what-is-left-to-be-donehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/insurance-sbi-300189602-1-1736815842922-compressed.jpg) ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/4-da-450x561-1736815842886-compressed.jpg) _By_ **_Oliver Werneyer,_** _CEO and co-founder, Imburse_ The [insurance sector](https://www.financedigest.com/whats-driving-consumer-opinion-in-the-insurance-sector.html "What’s driving consumer opinion in the Insurance Sector?") has been devoting a lot of its resources and attention to enhancing its core competencies in recent years. These would traditionally be centred around underwriting, claims, and distribution. In this area, [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") consider themselves experts. [Insurers’ investments](https://www.financedigest.com/classic-car-insurance-broker-launches-future-classic-investment-guide.html "Classic car insurance broker launches Future Classic investment guide") focus heavily on data analytics, creating and accessing new data sources, and developing new distribution partnerships and product development. Exciting and cutting-edge enhancements has the [insurance industry](https://www.financedigest.com/how-can-the-insurance-industry-avoid-having-a-kodak-moment.html "How can the insurance industry avoid having a ‘Kodak Moment?’") very giddy while appealing to the strong traditions and disciplines of the sector. These advancements are delivered with excellent logic, reason, supporting data, and proof. [Insurers are getting better at categorising and identifying risks](https://www.financedigest.com/banks-and-insurers-right-to-prioritise-technical-skills-in-operational-risk-but-must-not-overlook-training-in-nurturing-talent.html "Banks and insurers right to prioritise technical skills in operational risk but must not overlook training in nurturing talent  ") and creating more distinct risk pools that can be measured and priced. The insurance [industry offers policyholders a simple contract that exchanges](https://www.financedigest.com/gumgum-announces-industrys-first-100-brand-safe-ad-exchange.html "GumGum Announces Industry’s First 100% Brand Safe Ad Exchange") several small payments to the insurer in return for a significant pay-out if the worst happens. However, what has been completely neglected is the operational modernisation and [technological revitalisation of the insurer’s](https://www.financedigest.com/modernisation-of-insurance-technology-saves-invaluable-time-and-money.html "Modernisation of insurance technology saves invaluable time and money") capabilities and tools. Lines of [business are still generally run](https://www.financedigest.com/4-signs-you-have-what-it-takes-to-run-a-business.html "4 Signs You Have What It Takes to Run a Business") by antiquated legacy systems or multiple IT systems for varying reasons; we often see this in areas that are not considered core competencies. One of the main areas this is felt is the [customer experience of the whole insurance engagement](https://www.financedigest.com/customer-engagement-in-the-insurance-sector.html "Customer engagement in the insurance sector"). Customer expectations are very much created by other industries, such as e-commerce, digital banking, [food delivery](https://www.financedigest.com/european-food-delivery-shapes-up-with-getirs-gorillas-buy.html "European food delivery shapes up with Getir’s Gorillas buy"), mobility, and entertainment. They are all obsessed with great visuals, efficient journeys, and a fantastic [payment experience](https://www.financedigest.com/how-netflix-justeat-and-uber-raised-the-bar-for-the-payments-experience.html "How Netflix, JustEat and Uber raised the bar for the payments experience"). Something that [customers are now also expecting from their insurer](https://www.financedigest.com/should-insurers-buy-data-direct-from-their-customers.html "Should insurers buy data direct from their customers?"). From my viewpoint, payments will play a critical role in delivering an insurance agreement. However, many [consider payments mission-critical to their operations](https://www.financedigest.com/europes-wizz-air-considering-a-saudi-operating-license.html "Europe’s Wizz Air considering a Saudi operating license") but not a core competency. It’s not something they can [invest in and create value](https://www.financedigest.com/procurementin-european-private-equity-investment-adding-value-to-the-boardroom.html "Procurement in European private equity investment – adding value to the boardroom.") from outside their own systems. They generally do not have dedicated resources or teams for the payments topic and would not [hire payments specialists](https://www.financedigest.com/nine-tips-for-hiring-quickbooks-specialists-in-2022.html "Nine Tips for Hiring QuickBooks Specialists in 2022"). There is often not even a [clear owner of the subject of payments in the insurer](https://www.financedigest.com/post-brexit-insurance-reform-clear-before-december-says-boes-woods.html "Post-Brexit insurance reform clear before December, says BoE’s Woods"). It sits anywhere between the CFO, CTO, and COO, all of which have different priorities and evaluation criteria. There is also a [reason why insurers](https://www.financedigest.com/reasons-you-need-a-car-insurance-when-driving-in-thailand.html "Reasons You Need a Car Insurance When Driving in Thailand") feel like this. That is because [payments are painful](https://www.financedigest.com/taking-the-pain-out-of-payments-for-the-21st-century-worker.html "TAKING THE PAIN OUT OF PAYMENTS FOR THE 21ST CENTURY WORKER") to deal with. [Insurers need](https://www.financedigest.com/breaking-down-the-types-of-insurance-you-need.html "Breaking Down the Types of Insurance You Need") to cover both collections and disbursements and pick payment technologies that fit customer interaction, e.g. bank, credit cards, vouchers, [virtual cards](https://www.financedigest.com/virtual-cards-in-the-travel-industry.html "Virtual cards in the travel industry"), wallets, etc. Because no [payment provider covers all markets and all technologies](https://www.financedigest.com/from-the-experts-5-payment-technology-trends-to-look-out-for-in-2016.html "FROM THE EXPERTS: 5 PAYMENT TECHNOLOGY TRENDS TO LOOK OUT FOR IN 2016"), and in general more collections than disbursements, they would have to connect to multiple payment providers to get the payment coverage in place. For example, they would need [credit cards](https://www.financedigest.com/more-businesses-investing-in-assets-like-virtual-credit-cards.html "More Businesses Investing In Assets Like Virtual Credit Cards") and alternative payments from a PSP, bank transfers from a bank, and vouchers from a voucher company. The good news is that the payments [world has nearly everything on offer in terms of payment technology](https://www.financedigest.com/is-wearable-technology-ushering-in-a-brave-new-healthy-world.html "Is wearable technology ushering in a brave new healthy world?") and experience that an insurer might need. However, [insurers do need to select](https://www.financedigest.com/5-tips-for-selecting-the-best-car-insurance-coverage.html "5 Tips for Selecting the Best Car Insurance Coverage") multiple providers. Connecting to various providers means multiple integrations to make and maintain into old, complex, or different IT [systems by people who don’t specialise in payments](https://www.financedigest.com/covid-19-putting-a-spotlight-on-mea-payment-systems.html "COVID-19: Putting a spotlight on MEA payment systems"). Multiple integrations [mean high costs](https://www.financedigest.com/spiralling-azure-costs-dont-necessarily-mean-your-cloud-strategy-is-off-course.html "Spiralling Azure costs don’t necessarily mean your cloud strategy is off course"), resources tied up, and other priorities that can’t be delivered, all for something considered not a core competency. This results in payment-related projects, on average, taking seven times longer, [costing 11 times](https://www.financedigest.com/netflixs-gaming-foray-will-cost-time-and-money-wall-st.html "Netflix’s gaming foray will cost time and money – Wall St") more, and failing eight times more than expected. This would be considered a high risk for executives to allocate [funds and resources](https://www.financedigest.com/norway-sovereign-fund-backs-teck-resources-in-battle-with-glencore.html "Norway sovereign fund backs Teck Resources in battle with Glencore") and take the personal reputational risk. [Insurers would prefer](https://www.financedigest.com/two-thirds-of-consumers-would-prefer-to-deal-with-a-single-provider-for-insurance-products.html "Two-thirds of consumers would prefer to deal with a single provider for insurance products") to do nothing drastic and look for small, incremental changes of no real significance. It’s painful and [challenging when you have no one to help you navigate](https://www.financedigest.com/unfolding-the-great-payments-disruption-how-consumers-can-navigate-this-new-financial-world-and-how-financial-institutions-can-rise-to-the-challenge.html "Unfolding the Great Payments Disruption – how consumers can navigate this new financial world and how financial institutions can rise to the challenge") that space. Thus, it is nearly impossible for [insurers to offer anything ground-breaking without changing their entire core systems or using solution](https://www.financedigest.com/vias-cloud-based-solutions-ensure-painless-office-move-for-insurance-body.html "VIA’S CLOUD-BASED SOLUTIONS ENSURE PAINLESS OFFICE MOVE FOR INSURANCE BODY") providers to solve this integration problem. When compared to other [sectors that can offer customers enhanced payment](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector") experiences through a variety of methods, insurers are not as prepared to take the time to invest in this kind of transformation. Ultimately, allowing insurers to continue to [fall behind](https://www.financedigest.com/behind-ftxs-fall-battling-billionaires-and-a-failed-bid-to-save-crypto.html "Behind FTX’s fall, battling billionaires and a failed bid to save crypto") in the shift to digitalisation. They will always be very slow to [deliver because they are always looking to buy solutions](https://www.financedigest.com/5-ways-data-integration-solutions-are-helping-financial-organizations-deliver-improved-outcomes.html "5 Ways Data Integration Solutions Are Helping Financial Organizations Deliver Improved Outcomes") from fast-moving sectors (e.g. payments, UX/UI) and connect them to their very slow-moving core competencies. The core competencies and their evolution set the pace, and the other sectors completely out-pace these, meaning [insurers struggle](https://www.financedigest.com/uk-banks-and-insurers-told-to-step-up-help-for-struggling-customers.html "UK banks and insurers told to step up help for struggling customers") to keep up with the change. It is clear that [insurers want to drive more business](https://www.financedigest.com/are-there-tax-breaks-for-business-health-insurance.html "Are there tax breaks for business health insurance?") value through payments but have the reality of system, knowledge, and capacity limitations to deal with. For insurers to make rapid advancements in areas not considered core but mission-critical, such as payments, they need to leverage the [technologies and services from a specialised solution](https://www.financedigest.com/peppermint-technology-revamps-communications-with-via-voice-solution.html "PEPPERMINT TECHNOLOGY REVAMPS COMMUNICATIONS WITH VIA VOICE SOLUTION"). Partnering with such solution providers enables insurers to get all the technology, support, and competency they need to deliver anything in payments without [major IT projects or costs](https://www.financedigest.com/britain-delays-major-rail-project-hs2-as-costs-soar-again.html "Britain delays major rail project HS2 as costs soar again"). This way, they can control their portfolio or [payment vendors, set up the payment options, and access any payment technology](https://www.financedigest.com/why-anti-spoofing-fingerprint-technology-is-essential-for-the-continued-growth-of-digital-payments.html "Why anti-spoofing fingerprint technology is essential for the continued growth of digital payments") in the market for a fraction of the cost, time, and resources. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---