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September 10, 2021 at 03:11 PM
What You Need to Know
- The insurance claim payment company One Inc. already works with many property and casualty insurers.
- One of its major relationships is with John Hancock.
- The company recently hired a CEO who has worked for the payments division at Zelis.
Life insurers could soon be paying more claims through virtual payment cards.
Traditionally, many life insurers have been so conservative that they have resisted accepting payments made through credit cards or debit cards, let alone pushing cash into cards.
But One Inc., a Folsom, California-based insurance payment company founded in 2006, recently formed a relationship with Mastercard, a Purchase, New York-based payment card giant.
MasterCard will work with One to combine Mastercard’s Mastercard Send payment program with One’s ClaimsPay benefits payment program.
One has marketed the ClaimsPay program heavily to issuers of personal property and casualty protection products, such as homeowners insurance, but one of One’s relationships is with John Hancock.
At this point, One helps Hancock only with collecting payments from customers, not with making payments. But, in theory, it’s possible that life insurers could eventually join P&C issuers in using virtual payment cards to make benefits payments as well as to collect premium payments.
A Claim Payment Shift?
Today, typical life insurers pay death benefits mainly through checks, an online checking account or electronic fund transfers.
Even on the P&C side, where many issuers make a point of promising customers rapid payment, U.S. issuers still pay about 75% of claims by sending paper checks, One reports.
With the new One-Mastercard program, a life insurers could also pay life insurance benefits, annuity benefits or other benefits through online payment cards.
The new approach could be especially useful to younger beneficiaries who are unused to checking accounts, or to beneficiaries outside the United States, who may be in countries with different electronic funds transfer conventions and no remaining check processing operations.
