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How the evolution of payment hubs has helped to overcome challenges in P&C, health, and life insurance verticals.

Industry pain points 

The insurance industry has historically been fragmented from a system perspective, burdened with manual processes that often result in sub-par and inconsistent user experiences. To varying extents, this has been true among all insurance verticals, whether it is a health insurer, a life insurance company, or a property and casualty (P&C) company. All of them are seeking ways to improve their technology to better serve their internal users, shareholders, and — most importantly — their customers.

To evolve, the insurance industry is making compelling efforts to modernize and streamline its inefficiencies with digital updates to multiple core systems, communication platforms, call centers, and interactive voice response (IVR). And for good reason — it’s reported that 75% of customers expect companies to use innovative technologies to improve their experience, and another 67% of customers say that the way a company uses technology reflects how it operates in general. The goal is to create efficiency within the organization, lowering costs to redirect funds to use in their core business of selling insurance and improving the most important metric of all — customer satisfaction. 

As a result, the insurance industry is undergoing a significant transformation, with digital payment hubs playing a pivotal role. A payments hub is a central system for managing incoming and outgoing payments, connecting the support teams to dozens of disparate systems, different UI/UX experiences, internal controls, and compliance. These centralized payment hubs give treasury, operations, and other leaders a single source of truth. As a result, management can make decisions about building their strategic branding across all business units, no matter what legacy system they are on.

The expense of implementing a payments hub is significant, but in the end, the ROI dwarfs the cost and effort needed. That’s thanks to the so-called “Amazon Effect,” where a more streamlined company results in more satisfied customers who are able to use technology that works quickly and efficiently.

The evolution of digital payment hubs

Did you know that the reason some life insurers only accept ACH is because their systems didn’t accept credit cards 30 years ago? That’s the legacy of the insurance industry, which has traditionally relied heavily on disparate, sub-par systems, manual and paper-based processes, and operational controls that require five times as many people working on redundant platforms, leading to wildly different payment and communication experiences. That’s a major issue for insurers that must reconcile multiple systems, not just bank accounts. 

P&C has especially felt the need to evolve due to its more advanced technology requirements compared to healthcare and life insurance. P&C companies, especially the global ones, must spend millions of dollars figuring out how to build very complex payment structures for their businesses overseas. None of this is necessary, and all of it is changing, in a very big way.

Insurance companies are increasingly adopting integrated digital payment solutions — such as instant electronic payouts that allow for payouts directly to the claimants — making the process faster, more secure, and better aligned with customer expectations. They are implementing digital wallets so customers can immediately access their insurance card to see how much they owe, review multiple policies, and even receive digital disbursements.  Digital wallets are proving to be a powerful communications tool, informing clients about the claim progression, alerting them when their premium is due, and enabling them to view their monthly statement.

The challenges complicating the insurance industry evolution

With such obvious benefits, what’s holding back insurance companies from their digital transformation? From our experience working with dozens of P&C, health, and life insurers over the last 10-15 years whose own attempts to upgrade their technology did not come to fruition, we can highlight a few key reasons: 

  1. The corporations didn’t determine the true scope of the upgrade and were unable to align the proper resources for the project.
  2. There was an overall lack of strategic vision to carry out the project, notably the executive-level support necessary to guide the teams to completion.
  3. While key stakeholders were initially on-board with multi-million-dollar budgets, when the project didn’t progress as initially planned, funding and support dissolved, pushing the project out years or completely scrapping it altogether.

Altogether, one of the main obstacles to a successful transition has been a conservative approach to adopting next generation capabilities. Some insurance companies were/are using legacy systems built 40+ years ago. Accordingly, changing over to a new core system like Guidewire or Facets is a big undertaking, costing millions of dollars and requiring significant resources to implement without a service disruption. These transformations are typically done in phases and could take years to successfully complete.

Overcoming the challenges

In the last two to three years, key stakeholders have learned from other companies’ mistakes (or perhaps their own) and have built some of the best digital payment hubs in the world. In addition to updating their core system integrations, insurers have started to invest in consolidated legacy systems, hoping to improve their call center operations and antiquated back-end processes. 

Payment hubs have proven to be instrumental in this transformation, helping to address some of the most substantial roadblocks. These hubs offer solutions for auditing, security, and resiliency, all key market trends in the insurance industry. They also provide advances in identity verification and security to safeguard assets and customer information, ensuring the company follows governance, risk, and regulatory requirements.

In 2023, ACI Worldwide worked with one of the largest life insurers in the world to provide payments technology at the center of their digital payments hub — connecting dozens of core systems globally, with dozens of business units running through them. This hub connected all systems to provide centralized communications, financial system reporting, payments in and out, cost sharing reduction (CSR) technology, IVRs, communication channels, and other omnichannel processes and solutions.

In that same year, ACI worked with a large health insurer to replicate the same digital payment hub system, connecting their REST APIs and SDKs to facilitate payments on the web, as well as integrating their IVR, call center, alternative payment methods/real-time payments, digital wallets, and digital communications. Embedded payments hub capabilities further allow for frictionless, shared payment tokens for binder and premium payments and claim disbursements, all with next-day funding across all payment methods. By centralizing and providing a way for all these legacy systems to connect to a single source of truth, ACI may help save these companies millions of dollars a year.

The key to winning and making these massive multi-million-dollar projects successful? It’s the people who can work the process: the ELT (executive leadership team) in combination with business unit owner support and effective program management teams. If you are a global organization, get your team to start with an area (such as North America), prove it works, and then expand to the rest of the world. 


The rise of digital payment hubs in the insurance industry marks a significant step toward modernization, improved CX, and drastic cost reductions. While challenges persist, the industry’s efforts to overcome these obstacles underscore its commitment to innovation and customer satisfaction.

As digital payment hubs evolve, they promise to reshape the insurance payments landscape, offering improved efficiency, security, and convenience — but only if undertaken successfully! Implement the plan in stages and let ACI help ensure it’s a success.

Principal, Insurance & Healthcare Payments Technology

Robert has over 20 years of progressive experience in the Fintech & Healthcare industries, specializing in payments, core system consolidation, business development, account management, and public speaking. His expertise spans across all facets of enterprise payment solutions including C2C, B2C, B2B, C2B, and P2P, with a majority of his professional career working to improve CX while reducing costs with the largest insurers in the world.