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20th June 2018
LV= in trial agreement with Optal to streamline claims payments
Optal, a world leader in optimising B2B transactions, has announced a new trial agreement with LV= which aims to reduce cost and inefficiencies from B2B claims payments whilst generating extra revenue for the company.
The new trial will see LV= test embedding of Optal’s Virtual Account Number(VAN) solution into its internal claims payment processes for specific suppliers who are currently paid by cheque but who are outside of their managed supply chain. When the trial is successfully completed, the aim is to increase volumes as part of an overall Claims cheque reduction strategy and explore the integration of VANs within the wider LV= General Insurance Group.
Cheque-based payments have multiple drawbacks for insurers. They incur additional costs in terms of bank charges, printing, paper and postage; they’re susceptible to fraud or getting misdirected or mislaid; payment is slow; cashflow forecasting is difficult; and the payer has no course for rectification if any issues arise.
Optal VANs have the same promise-to-pay certainty as a cheque but none of the cost or inefficiency. The one-time virtual number is sent to the supplier immediately and is presented to their acquirer less than half a day from creation, with reconciliation automatic and immediate. This speed is essential in the motor insurance sector as sometimes suppliers will not release vehicles until they’ve been paid which can add extra inconvenience for customers, and it can also drive up costs, for example if replacement hire cars must be paid for in the meantime.
VANs remove the need for the insurer to store supplier bank details as they operate by the pull payment method, thus mitigating data breach risks. Plus, each VAN has an expiry date and can be enhanced with additional data including claim numbers to help prevent fraud.
Optal VANs are backed by the Mastercard network, meaning insurers can use the chargeback mechanism if there are any issues with the work carried out by the supplier. Insurers also benefit from a reward on all claims paid by VAN, boosting the bottom line.
“We are delighted to be working with LV= and are excited by the potential outcomes from both the trial and future uses for VANs within the company” said Andrew Downes, general manager at Optal.
Judith Coole, LV= Claims Operational Development manager, added “It’s been a pleasure working with Optal in developing new functionality that has the ability to transform claims payment processing.”
LV= Trends(107 articles)
Optal Trends(2 articles)