Technology has changed the way we work with money. Nowadays we bank by Internet or mobile phone and use plastic cards to pay for goods and services… Insurers are now using innovative card payment solutions in the claims settlement space too.
In May last year, South Africa’s leading short-term insurer, Santam Limited, introduced the Santam Prepaid Insurance Card as a claims payment tool. Instead of settling your client’s non-motor personal lines claim by cheque or bank transfer, the insurer simply issues a prepaid card with the amount of the approved claim pre-loaded.
The driving force behind this innovative payment solution is local firm DrawCard. The company launched South Africa’s first Visa gift card, first SA Visa payroll and incentive card and now Africa’s first Visa insurance claims card. It counts leading retailers, shopping centres and companies corporates among its clients.
Rewarding innovation
Their work on the Santam Prepaid Insurance Card hasn’t gone unnoticed. The groupDrawCard scooped the Best Corporate Prepaid Card Award at the 2011 Global Prepaid Awards held in London recently.
Philip Froom, Co-Founder and Managing Director of DrawCard, says the use of the technology in the insurance sector has been well received. “Brokers and clients find it an innovative offering, thereby enhancing the Santam brand as a leading insurer,” he said. “Clients appreciate the fact that the claim is paid into a ‘ring fenced’ card rather than getting lost among all the transactions in their bank account.”
Ready for retail therapy
The insured uses the prepaid card to purchase replacement items for the goods lost in the original claim. The Visa Prepaid Card can be presented for payment at any retailer, although Santam still informs the policyholder of preferred partners for the replacement of items.
Froom explains: “The Visa prepaid card allows the cardholder to spend at any Visa merchant or retailer. The cardholder, however, is encouraged to spend their claim monies at certain partner retailers, where they would receive cash-back rewards.” Other than best practice velocity limits, Tthere are no transaction limits on the card, which has a three year “life”. All possible measures and controls have been implemented to detect and prevent fraud.
The card offers benefits to both insurer and policyholder.
Benefits to the insurer include:
• Streamlining of the claims payment process which cuts administrative costs;
• The ability to place their brand in the policyholders’ wallets;
• A deeper understanding of the policyholders’ spending patterns;
• And the ability to seamlessly reload subsequent claims onto the same card.
Policyholders also benefit in that:
• They receive their claims in a quick and hassle-free manner;
• They don’t pay any transaction fees when using their card to spend at a retailer;
• They have the choice to spend their funds at any retailer to replace their goods, although they earn cash-back rewards when they spend their funds at certain participating retailers;
• And their claim monies are ring-fenced, ensuring a greater probability of the insured item being replaced.
Froom commended Santam for being among the first companies globally to implement a card-based claims settlement solution: “It’s very new internationally with only a handful of these type of short-term insurance programs in use.” The Santam Prepaid Insurance Card is a giant step forward for local insurers and it is only a matter of time before other insures follow suit.
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