Good customer relationships are very important in the insurance industry, as insurers generally seek to cover the customer’s requirements for insurance cover in a way that is as comprehensive and long-term as possible. This is the same for a direct insurer as an insurance broker or a conventional insurance company. Outstanding insurance premium payments are “issues” to be handed with the greatest of sensitivity. At the end of the day, the real challenge for debt collection for insurance companies lies in not jeopardising the customer relationship.
Many insurers still deal with claims management in-house. The same applies to debt collection, although it is not part of their core business. There is very much a need for streamlining within the industry, which is currently seeing fierce competition and massive pressure on costs. Against this backdrop, debt collection processes need to be made efficient. This means minimising the costs incurred from insurance debt collection, reducing the debt default rate to a minimum and avoiding “collateral damage” to customer relationships.
In the online age, the digitalisation of debt collection processes plays an important role. This applies not least because the insurance transaction up to and including debt recovery is now largely processed online or electronically. This is already standard practice in some sectors of insurance, such as car insurance or indemnity insurance. Customer relationships in these areas are already very much digital-based. So it is only logical for debt collection processes for insurance companies to follow this trend. This applies in particular to direct providers and insurtech companies, who already use the internet s their primary sales channel. Outsourcing debt collection activities is an opportunity to relieve the company of administration and costs.
PAIR Finance is a young, innovative outsourcing partner which is fully behind digitalisation for debt collection. The start-up is very different from the “traditional” players in the debt collection industry which were founded in the fifties and many of which still use outdated IT infrastructures. Much of the potential offered by information and communications technology is going untapped. This is what PAIR Finance wants to change. It is not just about more streamlined, faster processes, it is also about the intelligent use of data and modern approach strategies based on the latest scientific findings. As a debt collection service provider, PAIR Finance deliberately sets itself apart from the traditional “debt collection” philosophy, which is often associated with threats, intimidation and forthright approaches. Instead, it is al about persuasion, fairness and concessions. This approach is perfect for the insurance industry’s perception of itself as embodying seriousness and solidity.
In its debt collection work, PAIR Finance specifically and consistently applies modern behavioural research findings on a digital basis. The basic assumption here is that pressure and threats to defaulting customers are often counter-productive and actually achieve the opposite of their original intent, which is the settlement of an outstanding debt, where possible without a negative impact on the customer relationship.
PAIR Finance’s philosophy focuses on an individualised approach which takes the personality of the specific debtor into consideration. Compared to standard letters and methods, this approach strategy increases the probability of a debt being settled. PAIR Finance is targeting its digital services specifically ad insurance companies which have already signed up to the digital future and communicate with their customers online. This means efficient approaches can be implemented online with no changes in media format.
The basis of PAIR Finance’s approach is the systematic analysis of customer behaviour. Existing digital data is used to enable overdue clients to be assigned to specific “typical” groups. PAIR Finance uses intelligent, self-learning algorithms, so the system will constantly refine itself over time. The debtor is then approached, with the method chosen based on the group they are assigned to. The tonal range extends from “cooperative” via “forceful” to “logical”, depending on the stage of the collection process and what “works best” for the relevant addressee. Whatever tone is selected, all dealings are always polite and engaging. This is also a good fit with the insurance industry. PAIR Finance also builds bridges for the customer, by making payments as simple and user-friendly as possible. Nothing should stand in the way of the settlement of an overdue account.
Debt collection via PAIR Finance offers lots of benefits for insurance and insurtech companies: