InsTech's Henry Gale speaks to Oliver Werneyer, Founder and CEO of Imburse, to discuss the importance of payments to insurance, the adoption of payments technologies, and how Imburse is helping its clients remove manual processes.
Henry: Oliver, what led you to found Imburse?
Oliver: I started my first company when I was 16 in computer sales. I later worked in various actuarial roles and spent 12-13 years in insurance. My co-founder Carl and I originally created an app that used flight tracking data to tell people which gate their flight would depart from before the airport boards displayed it.
I worked at Swiss Re at the time and investigated selling parametric flight delay insurance through the app. Customers showed interest in a product that would pay them automatically when their flight was delayed, but the insurer could not make real-time payouts. Furthermore, although the real-time payment technology was available, it was not connected to the insurer's IT systems. It would be a million-dollar project lasting 15 months to integrate the payment technology into the various IT systems and finance processes.
My co-founder and I built a solution within three months, which led us to pivot our efforts into Imburse in 2018 to solve insurers' payment integration problems.
Henry: What problems does Imburse solve for its customers now?
Oliver: Insurers need to create operational efficiencies, digitalise their processes and improve customer journeys. Payments are a core part of achieving those objectives. Currently, many insurers have inefficient manual aspects to payment processes. As they digitalise, they need to incorporate new payment methods. Meanwhile, customers increasingly expect variety and flexibility in the payment methods offered.
Payments is not a core competency of insurers, so Imburse helps them integrate with payments technologies. Imburse is not a payments company – insurers still need banks and payments service providers to process the payments. Imburse is the layer between the insurance world and the payments world.
Henry: How do your customers quantify the cost savings from using Imburse?
Oliver: Insurers need around eight or nine people to maintain a basic payments connection: about four IT people and four to five finance people. When things go wrong, such as the payments system experiencing downtime, a single direct debit failing, or a customer paying the wrong amount by accident, staff must intervene to sort out the finance processes. So connecting, maintaining the technology and dealing with the manual processes has a significant resource implication for insurers.
Our customers find that using Imburse is 40-50% of the cost of using their resources for payment connections. The added benefits for the future include being able to switch payment providers easily without incurring extra costs. In addition, Imburse doesn't charge a percentage per transaction; it charges a licence fee that covers how many technologies are needed to connect and how many payment providers are being used at once.
Henry: How do insurers access Imburse's solution?
Oliver: Imburse connects with an insurer's system to communicate the core pieces of information needed for instructing payments. These are the direction of payment (paying in or paying out), the amount, the geography, and any data required for reporting or reconciling. Imburse then delivers a second connection, the single truth source, allowing insurers to report and reconcile all the payments.
The technology connected to Imburse varies depending on the insurer's system. Insurers with newer systems can use APIs, but others can use bulk transaction files, CSV or data pipelines.
Imburse's platform is like an app store that insurers can use to set up the portfolio of payments vendors they want to deploy. Connecting to Imburse does not require changes to an insurer's processes or technologies.
Henry: What funding has Imburse raised?
Oliver: Imburse has raised $16 million USD to date. The company now has 56 employees across London, Lisbon, and Zürich.
Henry: Can you give some examples of insurance-specific payment complexities?
Oliver: Payments can be combinations of both in and out. For example, in a £20,000 GBP motor claim, £18,000 may be paid out to the workshop, £1,500 to the loss adjuster, and £500 to the client. These payments may be executed on different networks and take different lengths of time to conclude. An insurer can only reconcile its finance systems when all three payments are complete. In that situation, using Imburse can help the insurer keep track of the payments.
Another example is commission payments for brokers. Once insurers collect a premium, they need to pay out a commission. With Imburse, insurers can automate that, including retracting commission payments if a policy is cancelled.
Henry: Imburse has recently launched a Pay-by-Link feature. Can you tell us about that?
Oliver: The Pay-by-Link feature helps insurers communicate with their clients about payments. Manual payment processes are often caused by the insurer being distant from their customer. For example, if a policyholder pays for insurance by direct debit and the direct debit fails for one month because the account has insufficient funds, insurers would usually deduct twice the premium next month, and that payment may also fail. Pay-by-Link allows insurers to send an instant message to their policyholders by text, email or a customer portal. The customer receives a URL that can capture their payment data securely. This way, a policyholder can either use a different payment type this time or update their payment details for future payments. This speeds up the collection of amounts, reduces manual work and reduces the likelihood of policies lapsing.
Pay-by-Link technology exists in the market already, but Imburse simplifies the ability for insurers to leverage this technology within their own systems and feed into existing reporting processes. For example, previously, if a customer usually paid by direct debit made a one-off payment with a different method, the payment would be processed with a different provider and return a separate reporting file that insurers would need to reconcile in their financial systems. The insurer would also have to build and maintain the second provider connection. With Imburse, there is only one connection and consistent reporting.
Henry: Imburse also has partnerships with insurance administration systems. How do these operations work?
Oliver: Imburse's go-to-market strategy has three core areas: working with insurers directly, working with insurers' policy administration systems, and working with systems integrators. Imburse works with policy administration system providers because we want to make it easy for insurers to connect to us. Imburse comes pre-integrated into policy administration systems for billing and claims. Our ecosystem partners include providers such as Guidewire, Sapiens, Salesforce, Genasys and more.
Henry: What insurance clients does Imburse have?
Oliver: Imburse's clients include Zurich, Beazley, Yamaha Insurance (ANZ), Generali, Swiss Re and iptiQ.
Henry: What trends do you see in insurers' adoption of payments technology?
Oliver: Two themes are driving the adoption of payment technologies. Firstly, improving the customer experience for claims. For example, there is more traction in motor and household insurance because payments form a key part of insurers' ongoing engagement with their customers. Customers may claim multiple times a year, and if they have bad payment experiences, they are likely to switch insurers. Secondly, removing manual processes for premium collections, such as bringing in Pay-by-Link when a payment fails.
Henry: Can you give an example of how Imburse solved one of its clients' problems?
Oliver: One problem one of our insurer clients had when collecting premiums via direct debit was that they were paying out commissions to brokers slowly. As a result, some brokers decided to take payments on account, meaning they would pay the insurer the premium minus their commission. This caused accounting issues and more manual processes. With Imburse, the insurer could automate its commission payments to brokers and address those issues.
Henry: Why has Imburse joined InsTech as a corporate member and what sort of companies would you like to connect with?
Oliver: Imburse has joined InsTech to connect with the insurance community and discuss essential payment innovations. Being a member also supports us with fundraising and connecting us with incumbents. Imburse is interested in connecting with insurance incumbents. We want to understand better what pain points they are facing to inform what Imburse should build next.
To find out more about Imburse, please reach out to Oliver Werneyer on LinkedIn.