Insurance continues to undergo rapid transformation, driven by rising customer expectations and the increasing frequency of catastrophic claims. Automation and AI are already revolutionizing policyholder experience across the industry, but carriers can only see these benefits if they are implementing this technology strategically.

Premium payment and claims processing — key touchpoints for policyholders — are prime targets for digital transformation. As the most frequent customer interactions, utilizing technology for inbound and outbound payments can have a major impact on the policyholder experience and, ultimately, policy retention.

Policyholder experience as the driving force

In 2025, policyholder experience is the primary driver of digital strategies for insurance companies. According to a survey by Arizent Research, 35% of insurance professionals identify consumer demand for a better overall experience as the most important factor in their tech and digital strategy.

Many carriers are looking to kill two birds with one stone via technology that can improve policyholder experience while simultaneously reducing operating expenses. Over three-quarters (78%) of firms plan to increase their technology spend in 2025, targeting AI tools (36%), data and analytics (28%), and cloud/digital infrastructure (26%). These technologies will primarily be deployed in customer service, sales/quotes, and claims processing, emphasizing the critical areas carriers are focusing on today.

The impact of payments on policyholder experience

The stakes for satisfaction and retention are at their highest when it comes both inbound and outbound payments. These are two of the only interactions a carrier typically has with its policyholders. Not to mention that the customer’s finances — for claims, at a catastrophic moment of their lives — are on the line.

Fortunately, digital payment solutions for insurance help make these experiences effortless by streamlining transactions, reducing fraud risks, and saving time for the policyholder. Automation also ensures quicker access to payouts, reducing the time between first notice of loss and claims payout, which is particularly important in the era of extreme weather events.

The SaaS advantage

At the rate technology is moving, a critical piece of implementing automation is choosing solutions that allow for future upgrades. This is the only way to ensure carriers offer best-in-class customer experiences now and in the future.

According to Arizent, more than half (55%) of respondents believe that constant access to the most up-to-date software without system downtime or additional costs would significantly improve operations.

Software-as-a-service (SaaS) platforms offer several benefits for carriers, including automatic, continuous upgrades, compliance with data privacy regulations, and reduced IT resource requirements. With SaaS solutions, carriers never have to worry if their system is compliant or armed with the latest security patches.

Plus, all policyholders receive the latest and greatest features automatically. Want to start offering PayPal to make premium payments? SaaS allows carriers to make this available to their entire customer base with the flip of a switch.

SaaS solutions support comprehensive technology strategies, enhancing customer engagement and satisfaction while lowering costs and accelerating payments.

The impact on operational efficiencies

Policyholder experience is just one area deeply effected by cloud technology. Back office efficiencies, the agent experience, and cost savings can also stand to benefit from embracing automation! InvoiceCloud’s SaaS platform has demonstrated strong adoption rates among end customers, leading to significant improvements in e-payment adoption, paperless enrollment, and reduction in late payments.

American Farmers and Ranchers Insurance, for instance, modernized its payment technology with InvoiceCloud and achieved 62% digital payment adoption and a tenfold increase in paperless adoption, which saved $95,000 in print and mail costs the first year.

To learn more about how insurance carriers nationwide are leveraging technology to streamline their operations, get your free copy of Digital Insurance’s whitepaper, Harnessing Automation: Cloud and SaaS to Transform the Policyholder Experience, now.