Supply and demand are the eternal balancing act in the economy and also in payment transactions.

Drew Edwards, CEO of Ingo Payments, told Karen Webster that there has been a 7% year-over-year increase in the use of instant payments as a payout option in the insurance industry, according to data jointly found by Ingo and PYMNTS Intelligence.

Overall, 33% of consumers receive their insurance benefits immediately. This raises the question: what about the other two-thirds?

Simply put, he said, there is no problem with consumer choice in this mix. The problem is not one of demand: Individuals and households want the ability to get insurance claims paid quickly because those payments are tied to events (medical needs or accidents) they might not otherwise be able to afford. In fact, 80% of consumers choose immediate payouts when given the choice.

Nobody wants to wait weeks for a check – and for payment service providers, processing payments digitally is more cost-effective than issuing a check.

Regardless of whether the funds go directly into bank accounts, cards or digital wallets, Edwards said, and regardless of who receives the payout or whether the middlemen use aliases (which are popular with “middle generation” consumers), “they need it when they need it.”

Where the separation lies

As far as the separation is concerned, the problem lies in the supply.

“You will not offered “Instant payments,” says Edwards, pointing out that the complexity of the “send side” of the equation has hindered the ubiquity of instant payments.

There is an analogy here that sheds light on the challenges inherent in the insurance industry, said Edwards.

“I grew up in banking,” he said, “and I always said that banks are burdened with technology debt, but the insurance industry is worse off than banking.”

There are many siloed technology systems. One silo might store a single party’s auto claims, while multiple parties’ property claims might be tied to another silo, Edwards said.

For vendors like Ingo, serving insurance industry clients means that through the platform model they have been able to connect these legacy backend systems with payment functionality, allowing these large insurers to “interact with the modern world where the consumer has instant access.”

The actual payouts that the companies enable go far beyond claims – and immediate payments are also appreciated and valuable to the (recurring) broker commissions, the sellers and other stakeholders.

There are even industries where instant payouts are a given and not a choice, says Edwards. He cited the restaurant industry as an example, where employees must receive their tips digitally at the end of their shift to avoid walking around with lots of cash late at night.

“You have a choice,” he said, “and the money will be transferred immediately to your bank account.”

For the insurance industry, breaking down these silos is no easy task.

“There’s still a lot of work to be done,” Edwards said. But there’s a natural progression as larger players “solve” instant payments for smaller claims before moving on to more complex use cases and payments. Along the way, there’s an opportunity to monetize instant payments and make those payments the foundation of an ecosystem — spanning consumers, appraisers and body shops.

“They are evolving from being a cost to being a moneymaker and an incentive that influences consumer behavior,” he told Webster.