Property and Causality (PC) insurance touches just about every American, represents an $2 trillion TAM and is growing at a mid-single digit rate. However, there is a lack of transaction and payment uniformity for this important sector. Payment platforms are often a secondary consideration when insurance companies are setting up their online presence. This is despite the fact that interfacing between insurers, policyholders and service providers centers on these financial operations being efficient and reliable. We argue payments are the unseen backbone of the insurance sector, playing a fundamental role in managing premiums, claims and commissions. Perhaps insurance payment solutions will soon emerge from the shadows: One Inc and JP Morgan Payments are now collaborating to streamline this unwieldy payment environment.
In broad strokes, by definition, the dollar value of policies written annually should approximate the TAM, which is a staggeringly high figure. There is a premium associated with each policy which generates a payment transaction to the insurance company. Likewise, when claims are filed, amounting to nearly 50% or higher of the total premiums annually written, the insurance companies pay the customers to cover the losses. However, in a seemingly never-ending replenishment cycle, the PC companies must restock their reserves to cover the next “hurricane”. Bad news for PC customers but good news for payment companies because these are large, recurring transactions.
The PC industry is served by close to 4k providers in various forms like third party brokers and direct sellers. These companies write approximately 100 million auto policies, 50 million homeowners’ policies, and millions of commercial policies, which, at a minimum, is creating reliable payment transaction volume in the hundreds of millions, totaling close to $1 trillion in premium value every year! There exist specialized payment companies that serve this extraordinary market, and One Inc. is a singular example.
OneInc manages 250 customers, processes $85 billion in annual payments value, and integrates with 35 core systems. By all accounts, OneInc is leading the digital revolution in insurance payments. What’s more, OneInc and JP Morgan have partnered and become a force for change in the insurance payments landscape by delivering a single, unified solution for inbound and outbound payments.
“The insurance industry has a unique and complex set of needs when it comes to digitization, and One Inc’s payments framework complements our commitment to providing innovative solutions that help address these challenges,” states Jason Tiede, Global Head of Corporate Development & Partnerships at JP Morgan Payments.
The partnership is replacing outdated cheque systems in favor of digital alternatives—implying quicker, safer, and more cost-effective digital payment solutions.
