“Electronic Payments for Insurance Agencies (Featuring Duke Williams) – Episode 044”
by Steve Anderson and Ryan Deeds

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Summary:

On this episode of The Digital Broker, Steve and Ryan are joined by Duke Williams, founder of Simply Easier Payments, to discuss how electronic payments remain a challenge for many agencies, and how they can overcome those challenges to provide an experience their customers desire. By listening to this episode, you will learn:

  • How widespread electronic payments have become
  • Why so many agencies still refuse to accept them due to several regulatory and financial challenges
  • How Simply Easier Payments contends with each of those challenges to let agencies accept electronic payments legally, securely, and at no loss to the bottom line

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Recap:

A payments crisis is affecting insurance agencies. When they do have to take a payment from the insured, many agencies agree to take a check and not much else. Twenty years ago, this was perhaps tenable. Today, it’s a different story. Customers demand to pay electronically, and every other industry in the world is obliging them—except ours. Why?

We give agencies a hard time for being out of touch when they deserve it, but there’s more going on here than mere traditionalism. Agents and brokers survive on commissions taken out of premiums. Processing payments electronically involve a fee, typically around 3%. The fee is applied to the total premium before commissions are taken out, meaning a 3% fee can take a huge bite out of the agency’s commission, sometimes obliterating any profit.

It’s a lose-lose, it seems. By accepting electronic payments, the agencies lose money; by refusing them, they lose business. Ever on the lookout for ways to help agents and brokers drive profitability, Steve and Ryan talk to Duke Williams, a lifelong veteran of the insurance industry and founder of several Insurtech companies, including Simply Easier Payments, whose mission is to let agencies take electronic payments without losing their commissions.

What Duke has found is that you can’t take the fees out of the electronic payment process, but you can take the agency out of the fees. Simply Easier Payments enters into a merchant agreement with the agency’s partner bank and agrees to pick up the agency’s transaction fees—which it then charges to the agency’s customer. Thus, the agency is not the company’s customer; the person making the payment is.

Shifting transaction fees to the customer is common practice across several industries, but it hasn’t caught on in insurance, and that’s because our industry is so heavily regulated, Duke says. Laws concerning transaction fees and handling of customer funds vary from state to state; at times, they can overwhelm and discourage electronic payments further. One of the ways Simply Easier Payments ensures compliance is by refusing to take money from agencies, providing its service to them for free. If it did otherwise—if it entered into a contract with an agency—the company and the agency would be treated as one and the same by the regulatory authorities, and the company would thus be subject to the same restrictions that make it inoperable for an agency to accept electronic payments.

Duke is careful to point out that Simply Easier Payments is not a cashier. It is a comprehensive suite of tools that integrate into the agency’s workflow. Payments are reportedly the most common touch point between agent and customer, creating golden opportunities to upsell, follow up, or nourish the relationship in some other way—opportunities that agencies squander by neglecting to optimize the payment process. Lacking the means to accept electronic payments, agencies tragically redirect the customer to the carrier portal, triggering a troubling thought inside the customer’s mind: what do I need an agency for?

Simply Easier Payments comes equipped with a variety of API’s intended to restore the payment touch point to the agency. You can customize the payment page with notes or messages, or redirect the customer to a page of your own. You can arrange documents in any order you like before or after payment, to deliver better customer experience. You can centralize the whole payment procedure so you don’t have to keep chasing emails. The platform is very secure, employing the same encryption technology used by the Federal Reserve.

We’re all about operational excellence here at The Digital Broker, but this is a matter of being operational in the first place. A rising number of people prefer to pay electronically, and many know no other way. How do you plan on thriving if you’re effectively prohibiting people from giving you money? Customers have a way of migrating toward whoever makes it easiest to do business. Do you really want to hand the keys to the relationship to the carriers?

We invite you to join our Digital Broker LinkedIn group and tell us about your own attitude to electronic payments and customer touch points generally. We’ve been getting some great insights in the group so far, and we look forward to acknowledging them on future episodes. Might yours be one of them?

 

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