Modernize your claims disbursements for these 3 benefits

Today’s turbulent economic climate is nothing new for insurance companies who have been weathering the storm of low-interest rates and flat growth for over a decade. Cost-efficiency initiatives focused on processes like claims disbursements are now annual initiatives, but checks are still often in the mix. Is it finally time to replace checks with modern payments? Perhaps the best way to answer that question is to ask, “Are customers ready for digital claims disbursements?” 

According to the Deloitte Global Millennial Survey, millennials now make up 49% of the global workforce. As digital natives, they’re accustomed to mobile applications that accelerate and streamline the process of buying products and services from ride sharing to food delivery to adjacent industries like banking. And they’re not alone. According to Marqeta’s 2019 Digital Banking survey, the majority of people already do their banking online. In the United Kingdom, 72% of consumers said they do most of their banking online. In the United States, the number was 62%. Consumers would seem to be ready. 

“A strong digital distribution platform is essential for delivering the intuitive and personalized experiences consumers expect.”  — EY 2020 Global Insurance Outlook

Insurers seem to be ready too. Digitization has been a priority for years as insurers have invested heavily to upgrade core technologies. Today, the reasons for modernization have changed from updating legacy systems to powering new business models. Digitizing distribution has become a priority for insurance providers looking to more effectively and efficiently serve their customers, their agents, and their bottom line. Claims disbursements play a key role in distribution as they happen at the most important time in the customer journey — when customers need you the most. Digitizing claims disbursements with virtual cards can improve cost efficiency and positively impact the customer experience through faster claims disbursements and streamlined reconciliation.

Improved cost efficiency 

The challenging economic climate has made cost-efficiency initiatives a perennial priority for insurance companies globally. Digitizing claims disbursements by using virtual cards can be a wellspring for insurers looking for near-term cost-saving initiatives. Checks are expensive to produce due to the manual processing time they require. They are also vulnerable to fraud, whereas virtual cards with dynamic spend controls that authorize where, when, and how a card can be used are much less at risk.

Faster claims disbursements 

Most consumers have come to expect instant gratification, but paying claims by check or ACH can take days. Most of us purchase insurance to protect ourselves in times of duress, yet some insurers see claims as a major cost center. Only 57% of US adults feel confident that their insurance company will treat them fairly when they have a claim.1Forrester Analytics Consumer Technolographics® North American Financial Services Survey Q4 2017 (US)

Paying claims faster is a brand-building opportunity for insurers. Checks and ACH are slow and prone to errors, but paying claims via virtual cards using a modern card issuing platform empowers insurers to issue claims disbursements instantly. Digital processes can also significantly improve transparency. In addition, by sending payment in the form of tokenized cards to digital wallets, insurers protect the personally identifiable information of their policyholders and limit their exposure to fraud. 

Streamlined reconciliation

AP teams are only too familiar with the expense associated with remitting checks for claims. Checks get lost in the mail, and in some cases the mail can’t make it to the policyholder at all. Multiple checks are sometimes sent for the same claim, compounding the cost. A modern card issuing and processing platform streamlines complicated claims flow with virtual cards that support end-to-end transaction visibility and control.


Insurers face a growing number of challenges across multiple fronts. Digitizing the disbursement process and replacing checks with virtual cards is one initiative that yields multiple benefits. From optimizing cost efficiency to improving the customer experience, virtual cards offer a solution with measurable results.