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Life offices wasting £22m with outdated admin, claims BACS

Insurance companies are missing out on up to £22m in annual savings by failing to adopt modern payment methods, according to automated clearing house BACS.

The figure represents the costs involved in issuing cheques and includes the cost of stationery and administration rather than using the automated payment method direct credit.

BACS says the insurance industry issues 17 million cheques annually which equ ates to 40 per cent of all its payments. It claims that switching to dir ect credit would save life insurance companies £10.2m, general insurance £7.5m and private medical insurance £4.7m.

Direct credit allows organisations to make payments into a bank or building society acc ount.

BACS direct credit marketing manager Peter Blake says: “The insurance sector has made great strides in automation over the past few years but with 17 million cheques still in circulation, the industry still has a long way to go.”

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