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How to simplify insurance payouts with virtual cards

- 9 minute read

From manual processes involving significant amounts of paperwork to the persistent threat of fraud, claims payouts and expenses reimbursement pose considerable challenges for insurance firms and policyholders. However, amidst these complexities lies a modern solution: virtual cards. These smart tools enable insurance companies to make seamless, instant, and secure payouts to customers.

In this blog, we'll explore how virtual cards can provide a more streamlined approach to funds disbursement that not only addresses the challenges, but also brings innovation and efficiency to the insurance space.



What are the challenges with insurance payouts? 


Navigating insurance payouts presents a multifaceted challenge for both policyholders and insurers alike. Policyholders often find themselves faced with the dilemma of utilising their personal funds and enduring a sluggish wait for reimbursement, which affects immediate cash flow needs. The manual review of individual insurance claims or medical expenses, through the meticulous scrutinisation of each receipt, makes the entire process complex and slow for all parties involved.  

On the insurer's end, the option of bank transfers, to disburse funds to clients, may seem straightforward, but the considerable processing costs, further exacerbate the inefficiency of the payout system. Additionally, the threat of fraud looms large, with fraudulent claims estimated to cost honest customers and European insurers a staggering €13 billion annually. Addressing these challenges demands collective efforts to streamline and fortify security measures for payouts within the insurance industry.  


How can virtual cards simplify claims payouts?

Innovations in embedded finance, particularly integrated virtual card (VCN) solutions, are changing how payments are made across many industries, including the insurance space. Offering a streamlined approach, virtual cards can be directly embedded within the claims process, bringing a plethora of benefits to both policyholders and insurers. 

With virtual cards, insurers can bid farewell to costly bank transfers, with funds being preloaded on the cards, which simplifies the entire process of reimbursement to policyholders. Not only that, but by integrating virtual cards into the claims process, insurance firms minimise the complexities of time-consuming claim reviews and manual processing, therefore optimising their productivity and workflow.  

For policyholders, the benefits are just as compelling. Embedded virtual cards provide a seamless experience, with instant and secure access to funds, that spare clients from upfront payments and submitting receipts for reimbursement. The convenient and integrated experience improves customer retention, by strengthening the insurer's value proposition, fostering long-term loyalty. This is an essential factor for the insurance industry where switching providers is common practice. Research by indicates that 75% of UK home insurance customers choose to shop around before committing to buy a policy. Ultimately, the adoption of virtual cards within the insurance industry is a strategic move towards better operational efficiency, enhanced customer-centricity, and minimised risks.

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How our partnership with Eyst Technology enables simple claims payouts

Alongside Eyst Technology, a French insurtech, we have pioneered a transformative approach to insurance payouts. At the core of our partnership is a sophisticated payout solution that empowers policyholders to settle their claims and medical bills, without the burden of upfront payments. Central to this solution are Mastercard® virtual claim cards, which can be customised with the branding of insurance firms, instilling customer confidence and loyalty. The virtual cards enable policyholders to effortlessly pay for expenses related to their claims or healthcare services, with funds conveniently preloaded by insurers, given claims are approved.

The flexibility afforded by virtual cards extends far beyond slashed processing costs and optimised operational efficiency for insurance firms; indeed, insurers have the autonomy to set specific spending limits, utilising Merchant Category Codes (MCC) and Merchant ID (MID) codes to tailor card usage according to their policyholders needs. 

Supporting the seamless process of funds management and disbursement is a robust infrastructure. Insurance firms are equipped with a dedicated master account and access to the SEPA payment scheme, which enables them to manage rolling capital. Moreover, the SaaS solution provided by Eyst Technology, which has been specifically designed for the insurance industry, empowers firms to create cards with preset fields, oversee account details and card transactions in real-time. Through APIs, insurance firms can extract these crucial insights and integrate them into their existing information system. This granular visibility not only serves as a shield against fraudulent activities, but also fosters greater transparency and accountability within the payout system.  

Beyond the immediate benefits, virtual claim cards open up opportunities for insurers to enhance the overall customer experience and drive value. The integration of virtual cards within digital wallets offers policyholders unparalleled convenience, while the insights gained from card spend can help insurers provide exclusive discounts and cashback incentives, further levelling up the experience for policyholders. 

With swift onboarding and setup, we’re committed to delivering a frictionless experience for insurers, ensuring a seamless integration and rapid deployment of this modern payout solution. As insurers navigate an increasingly complex and competitive landscape, our partnership with Eyst Technology provides a more positive experience for policyholders by boosting overall satisfaction, whilst strengthening the insurer’s brand image.  


In conclusion

The challenges insurers face when disbursing funds to policyholders are multifaceted, encompassing manual processes, costly bank transfers, and fraudulent claims attempts. However, virtual cards are emerging as tools that enable insurance firms to easily and seamlessly reimburse clients 

By integrating virtual cards into the payout process, insurers can avoid the inefficiencies of traditional payout methods, reduce processing costs, optimise operational efficiency, and ultimately enhance the experience for policyholders.   

In essence, virtual cards represent an innovative solution to the challenges insurers face and a progressive tool for the insurance industry as a whole. As insurers embrace digital payment methods for payouts, they pave the way for a future where efficiency, transparency, and customer-centricity reign supreme  



Ready to start using virtual cards?


To discover how we can help you integrate virtual cards within your insurance payout process get in touch with our friendly team of embedded finance experts. 

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