InsurCard has chosen Visa Inc. as the preferred payment network for the debit cards it offers to pay insurance claims, the Philadelphia-based card marketer announced Jan. 20.
Insurers favor reloadable debit cards because they shift some of the risk, and a lot of the paperwork, away from themselves and to companies like InsurCard, the company said in a news release.
The advantage to consumers is a faster payment. “If you have damage to your home, you’d receive a card on the spot, and you would have money loaded on the card for hotel or car,” says Richard Meek, vice president of sales and marketing for InsurCard. “That card would be reloaded as many times as it took to actually close your claim.”
The Bancorp Bank issues the InsurCard card, which can also bear the MasterCard brand.
About 1,000 InsurCard cards are in circulation throughout the United States, used primarily to pay out workers’ compensation claims. They also pay catastrophe relief and auto claims.
InsurCard, a 3-year-old subsidiary of Service Network Design LLC, is distributing those cards through several third party administrators that handle insurance claims for big companies. InsurCard is in the “implementation phase” with a top-five insurer, Meek says.
“The business case for insurers needs to be clearly spelled out and in some cases, ACH is a very viable alternative,” Zilvinas Bareisis, a senior analyst at Celent, said in an e-mail.
The cards will grow more pervasive over time, analysts say.
“The only limit on a prepaid card is imagination,” says Brian Riley, a research director in the bank cards practice at TowerGroup. “When it comes to distributing funds, they can’t be beat.”
