From farming to trucking to newspapers, long-established sectors are finding new financial stability in ecommerce. It’s happening in the insurance industry, too, where macroeconomic challenges are prompting insurers to adopt new strategies and drive down operating costs.
Stripe is helping them navigate this trend with financial infrastructure that reduces friction between insurers, agents, and clients, and scales to embrace new business models and changing economic conditions. Since 2020, the number of companies using Stripe to sell insurance online has more than doubled, and in the last 12 months alone, insurers on Stripe collectively processed nearly $8 billion in payments.
Modernizing the customer experience
Pie Insurance, a provider of workers’ compensation insurance for small businesses, turned to Stripe to let customers pay directly from their business bank accounts. Using Stripe Billing, Pie built a custom billing solution and doubled its ACH Direct Debit penetration rate to 58%—an improvement that helped reduce payment failure rates and lower transaction costs.
Pie also automates its payments collection and reconciliation process with Stripe Invoicing, and benefits from advanced features like smart retries and adaptive acceptance, which help ensure Pie’s customers make their payments on schedule.
“Simplicity is not native to insurance, but having a great distribution model is just as important as having a fantastic insurance product,” said David Samuels, chief commercial officer at Pie Insurance. “With Stripe, we vastly improve our customer experience and keep hitting our growth goals.”
Tailoring to client and agent needs
Data integration infrastructure helps insurers tailor their offerings to their clients’ needs. NEXT Insurance, a digital insurtech company offering small business insurance, uses Stripe Financial Connections to let small businesses conveniently link their bank accounts to handle payments automatically on an ongoing basis.
“Building insurance products for today’s businesses requires an immense amount of time and resources,” said Eric Harnden, vice president of partnerships at NEXT Insurance. “Being able to quickly onboard customer bank accounts with Financial Connections allows us to stay nimble so we can continue to equip our customers with a seamless, simpler insurance experience.”
Digital infrastructure is modernizing relationships between providers, customers, and agents throughout the insurance industry. CoverWallet, an insurance provider that makes it easy for SMBs to understand, buy, and manage insurance, uses Stripe payments and Stripe Connect to streamline multiparty payment flows.
“Customers expect a smooth purchasing experience no matter what they are buying, and Stripe has allowed us to deliver on that,” said Amanjot Khaira, chief product officer at CoverWallet. “The automation of payment flows through Stripe Connect eliminates the need for manual splitting and reconciliation of payments with multiple partners, allowing us to focus on providing exceptional service to customers."
Building to scale
Insurers have long relied on inflexible legacy systems. Luko, a Paris-based sustainable home insurance company, reinvented its customer experience by offering 100% digital onboarding through Stripe. This helped Luko automate payments processes and integrate local payment methods, all while keeping costs low.
“With Stripe, our customers can be onboarded digitally across all regions,” said Raphaël Vullierme, CEO of Luko. “Being able to quickly bring new customers on board has helped us stay flexible as we scale to new markets.”
Stripe’s digital tools are helping insurers find new markets and launch new products. Australian provider Flip used Billing to create a new category of on-demand insurance with pay-as-you-go daily and weekly policies that can be turned on and off as needed. Customers benefit from instant, flexible coverage, and can have claims payouts issued directly to their bank accounts.
Staying ahead of the curve
With more economic activity moving online, ecommerce fraud has become a business-critical challenge, particularly in financial services. In the first quarter of 2022, ransomware attacks decreased in most industries, but increased 35% against the financial services industry. As a result, insurance providers including Cuvva, Sofía, and Pie Insurance are integrating Stripe Radar into their payments stack to combat evolving fraud threats. In 2022, Radar users benefited from a 41% reduction in disputed charges. It’s one more way that insurers are doing business differently—and thriving—with Stripe.
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