How insurers are using digital payments to get ahead

Most insurers still rely on checks, EFTs, and cards – methods that fall short of what today’s digital-first and modern customers expect.

That matters, especially since 64% of modern policyholders say insurance should be managed entirely online and are quick to abandon purchases if the payment experience isn’t seamless.

Real-time payments (RTP) offers a clear solution. Available 24/7/365, RTP enables instant claims disbursements and premium payments via account-to-account (A2A) transfers or virtual card issuing.

RTP helps insurers: 

• Deliver a faster, more convenient experience for policyholders

• Speed up claims processing and reduce operational strain

• Improve cash flow, even as claim costs and cycle times rise

69% of large insurance firms say real-time payments are ‘very important’ to their business

Source: PYMNTS

Legacy systems and siloed data slow insurers down, especially when it comes to reconciliation, reporting, and scaling new services. Today, 66% of insurers still juggle multiple data sources, increasing the risk of errors and inefficiencies. 

API-first payments infrastructure helps insurers simplify operations with access to richer, real-time data and automated workflows. 

Even better, with a platform like Adyen, insurers get: 

• Consolidated reporting for a full view of transactions

• Automated reconciliation that cuts manual work

• Real-time performance insights across channels

74% of insurance companies still depend on legacy systems

Source: ClearWater Analytics

Insurance fraud costs the industry AU$461 billion annually. And customers are worried – 78% say fraud is a top concern, but traditional tools aren’t keeping up.

Traditional detection models favoured by insurers often fall short when faced with modern fraud tactics. Overly rigid, they can also cause delays for legitimate claims, frustrating policyholders.

That’s why integrated tools from API-first platforms are a better choice, providing critical capabilities like machine learning, real-time verification, and customisable risk rules built-in.

Insurers are already acting:

• Using virtual cards with spend controls to prevent claims fraud

• Switching to payment links in call centers to avoid reading card details aloud

• Replacing PANs with network tokens to block fraud attempts

35% of insurance exes plan to use generative AI for fraud detection this year

Source: Deloitte

As insurers bring products online, distribution is shifting from traditional agents to embedded insurance, where coverage is offered directly within digital channels at the point of need. 

No surprise, the embedded insurance market is set to grow from AU$325bn in 2025 to AU$1,463bn by 2030, fueled by demand for digital, on-the-spot coverage. 

To succeed, insurers need more than just new partnerships. They need modern infrastructure. API-first platforms and flexible, digital payments are essential to embedding insurance in a seamless way.

Digital payments help insurers support in-the-moment purchases, collect premiums, and disburse claims in real time, all while reducing manual handoffs and internal delays.

Payments are no longer a back-office function. Leading insurers are leveraging payments as a strategic driver to improve experiences, boost efficiency, and future-proof their business.

At Adyen, we’ve seen what’s possible when carriers bring payments and infrastructure together on one single platform. Helping insurers to move faster, reduce complexity, and better serve today’s digital-first policyholders.  

Curious what that looks like in action? Explore how we’re helping companies like Clearcover lead the way, and let’s talk about how we can support your next move.