LV= has announced a trial agreement with B2B payment solutions provider, Optal .
The agreement aims to reduce cost and inefficiencies from B2B claims payments and also generate extra revenue.
The 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 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.
Andrew Downes, general manager at Optal said: “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”.
There are plenty of drawbacks for insurers when using cheque-based payments. They incur additional costs in terms of bank charges, printing, paper and postage. They are also vulnerable to fraud or getting misdirected or mislaid. The payment is slow and payer has no cause for rectification if any issues rise.
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.
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.