A2A FOR INSURTECHS

The benefits of account-to-account payments for InsurTech

#1: Improve the customer experience

Anticipating policyholders’ needs is crucial to InsurTechs’ success. Policyholders don’t want to deal with intermediaries or add card details multiple times. They want fast, reliable payment alternatives, and catering to their needs has advantages for firms too. A quick, seamless payment process means efficient premium collection and prompt payouts. With A2A payments solutions, providers can ensure a smooth journey and customer retention.

#2: Improve risk management

The insurance industry relies on accurately calculating risk, and payments shouldn’t be an exception. A2A payment solutions provide functionality such as risk engines and amount limits, allowing insurers to automate areas of decision-making by using predefined parameters. This essentially outsources the complexity of risk management to the A2A provider, ensuring an extra layer of security for insurers.

#3: Reduce chargebacks and mitigate fraud

Card fraud is increasingly common globally. In Europe, fraudulent transactions accounted for over €1.87 billion⁵ of losses in 2019. When an insurer has a relatively high chargeback rate or is subject to fraudulent card use, card issuers will automatically consider them high risk. A2A payments sidestep the problem by requiring strong customer authentication (SCA), requiring end-consumers to confirm their identities for the majority of transactions, and ensuring greater security all round.

#4: Improve efficiencies and resilience

Account-to-account payments remove the need for costly intermediaries by allowing direct disbursements from one account to another. It’s a safe and secure method that streamlines cash flow by automating quick payments—including push and pull payments—and provides transparent, real-time data. A2A payments also improve client reach. Anyone with a bank account can use them, and policyholders can make prompt payments from anywhere without paying bank deductions.

#5: Reduce fees and increase cash flow

Account-to-account payments don’t come with the same interchange fees as card payments, meaning insurers keep a greater portion of their sales. Thanks to innovations like Open Banking, which allows APIs to connect banks with third-party providers, both consumers and insurers can benefit from instantaneous transfers, reducing not only fees, but administrative and accounting costs as well.