Despite a slow start, the use of prepaid cards for disbursing insurance claims has begun to pick up. First Aetna and now this announcement from Visa:
Visa Inc. V and InsurCard, a wholly owned subsidiary of Service Network Design, LLC (SND), today announced an agreement naming Visa as InsurCard’s preferred brand for the delivery of payment for insurance claims. InsurCard provides the insurance industry with card-based solutions for the payment of claims, expanding the penetration of electronic payments in an industry traditionally reliant on check payments.
“InsurCard is changing the insurance landscape by moving claims payments from checks to Visa Prepaid cards,” said Bob Mendte, president, InsurCard. “Insurance claims often require immediate or recurring payment, which can be cumbersome with traditional checks. Distribution using a Visa Prepaid card saves costs and creates efficiencies for insurers while improving the claimant’s experience,” said InsurCard’s Mendte.
The insurance industry has been particularly slow to adopt prepaid, as compared to other industries, which seems strange given the cost savings and benefits prepaid delivers to both those disbursing funds and those receiving funds:
InsurCard offers insurers a turnkey program that can lower payment processing costs – saving up to 85% compared to the cost of issuing checks1; improve cash control; enhance fraud protection; and boost customer service.
Policyholders enjoy immediate, secure delivery of funds and avoid waiting for a check in the mail, the need to cash or deposit a check, or waiting for a check to clear. InsurCard Visa Prepaid cards can be used anywhere Visa debit cards are accepted, including ATMs, and are protected against loss or theft by Visa’s Zero Liability2 protection.
Mercator Advisory Group believes insurers will benefit greatly from prepaid adoption, and that recent announcements are an indicator that this industry has finally figured it out!
Read the press release here: http://money.msn.com/business-news/article.aspx?feed=BW&date=20110120&id=12770521