Insurance Report 2026
Turning payments into a competitive advantage
This report combines insights from consumers and insurers to explore how the insurance sector can close the gap between policyholder expectations and business reality.
Chapter 1: The expectation gap
10% of consumers have gone into debt because of slow claim payouts
Today’s customers expect quick, digital payouts. For younger policyholders, this is more important than price.
While insurers recognise the importance of delivering this, few feel ready to act. Many still rely on cheques, a method that slows payments, adds cost, and creates frustration for customers.
Closing this gap starts with modernising payout infrastructure. Moving to digital-first payments, allows funds to reach customers quickly once a claim is approved. These methods also cut administrative costs, eliminate reconciliation delays, and improve customer experience and satisfaction.
Finding 1: Slow claim payouts impact consumer finances
Delayed claim payouts create financial strain for customers, forcing many to borrow or go into debt and often prompting them to switch providers as well. Getting claim payouts right isn’t just important from an operational perspective; it turns a traditional pain point into a reason for customers to stay.
“Adyen’s global reach supports ours as we manage the claim process for our partners and provide instant payments for approved claims in any currency and language.”
Are insurers' payout expectations too low?
Most insurers have an average payout speed of between 6 and 30 days. And there doesn’t seem to be much appetite to bring this number down. Less than one in 10 aim to pay out within a day.
54%
6-30 days
Insurers’ ideal payout time
24%
30 days
3%
Within 24 hours
Or are fraud concerns holding them back?
At the same time, 57% of insurers agree that customer demand for instant claim payouts will be one of their top three competitive challenges in the next five years. For now, the main blocker is fraud prevention. 63% of insurers say they are likely to adopt instant claim payouts by 2030 if fraud is brought under control.
You’re only as fast as your slowest process
In a bid to speed up claim payouts, many insurers are investing in AI agents to automate claims decision-making at the front-end. However, if this is layered on top of a legacy payments infrastructure, these gains will get lost. An AI agent might approve a claim in seconds, yet outdated payment systems could still delay funds for weeks. To truly deliver fast claims, AI-driven decisioning must go hand in hand with a modern payments set-up.
Finding 2: Insurers are lagging behind customer payment expectations
Customers don’t just compare insurer payment experiences against one another. They compare against the standards set by retailers who offer instant, flexible options like digital wallets. Meanwhile, many insurers still rely on slow, manual processes where cheques and bank transfers dominate. Modernising payment methods will help insurers meet (and exceed) rising expectations.
Manual processes are stalling progress
Customers rank retail as the top industry leading the way in online payments, far ahead of insurance. And while many still use bank transfers, younger customers are far more likely to prefer digital wallets for claim payouts.
That said, just 23% of insurers use digital wallets and many still depend on manual methods. The operational drain is costly, with 52% saying they dedicate significant resources to manually process payouts.
Digital payment methods are one step to differentiation, but virtual cards take it to another level. In this area, insurers are actually ahead of consumers. 39% of insurers already use virtual cards as key drivers in their fraud prevention strategy.
Is it time to cancel cheques?
91% of insurers still use cheques for up to a quarter of payouts. Yet our report found that “flexibility to receive payouts through their payment channel of choice (e.g., digitally rather than paper cheques)” is a top customer requirement.
Aside from operational inertia, there’s little reason to choose cheques over digital methods for claim payouts. Cheques are costly and create hours of manual reconciliation. They are prone to fraud and make it hard to manage liquidity as you never know for sure when they will be cashed. In Australia, where the cheques system is in the process of being wound down, the need for insurers to transition to more modern payment methods is even more pressing.
Finding 3: Price isn’t the only measure of value
Price still matters, but it’s no longer the whole story. For Gen Z and Millennials, how quickly and seamlessly payouts arrive can be just as important. This generational shift is widening the expectation gap. Younger policyholders care more about experience; older generations are more price-sensitive.
While the top factor influencing insurance choice is premium price, this is heavily stacked towards older generations: 70% for Silent Generation compared to just 43% among Gen Z. In the same way:
Payment methods influence 20% of Gen Z compared to only 5% of Baby Boomers.
Digital experiences resonate most with younger policyholders (18% of Gen Z and 16% of Millennials).
Chapter 2: From playing it safe to playing it smart
Almost a quarter of all claims are fraudulent
Fraud remains a big drain on insurers’ profitability and efficiency. But over-cautious fraud controls can backfire, slowing payouts and driving customers away. The solution isn’t to tighten every control, but to modernise them and find ways to prevent fraud before it happens. With smarter AI tools, insurers can protect revenue while delivering frictionless claim payouts.
Finding 1: Insurance fraud is not a victimless crime
93% of insurers in Australia estimate that up to 24% of insurance claims involve some form of fraud. Each suspicious claim triggers manual reviews, tying up valuable resources and slowing legitimate payouts. The cost for insurers is steep, but they’re not the only ones who suffer. High levels of fraud are priced into premiums, meaning honest customers feel the impact too.
The cost of fraud
In many cases, the cost of fraud is passed on to customers in the form of higher premiums. A report by Insurance Europe found that in the UK, “Fraud adds, on average, an extra GBP 50 a year to the annual insurance bill for every policyholder.”
Finding 2: Caution isn’t always the answer
Fraud prevention is essential. But rigid controls can end up punishing genuine policyholders by slowing claim payouts. However, it needn’t be that way. Consumers (especially younger ones) understand the security trade-off needed to receive faster claim payouts. In fact, many are happy to undergo additional authentication if it means they get their money faster.
When protection becomes friction
Insurers know their fraud controls are standing in the way of better customer experiences. Extensive checks and slow claim payouts can cause serious financial strain for customers.
Insurers also recognise the cost of this friction: 56% admit that slow payouts are a key reason customers switch providers. However, many customers are happy to jump through more security hoops if it means faster payouts.
Hassle-free security with delegated authentication
For insurers who want strong customer authentication without adding friction, delegated authentication offers a simple solution. By strengthening the authentication process, insurers can maintain security while keeping the payout experience seamless. Adyen’s delegated authentication solution can even recognise returning, already-authenticated customers, eliminating repetitive checks and keeping the journey smooth.
At the same time, open banking adds another layer of intelligence. Through Account Information Services (AIS), insurers can securely access verified bank data to support underwriting, leading to faster and informed decision-making.
Finding 3: AI will put insurers on the front foot
55% of insurers say fraudsters’ use of AI has made attacks harder to prevent. This is because many are still hampered by outdated systems. Manual reviews still dominate, slowing operations and leaving gaps that modern criminals can exploit. AI-driven detection can change that by preventing fraud before it happens. This won’t just protect revenue; it lets you pay legitimate claims faster and operate with greater confidence.
Modernising your anti-fraud toolkit
Insurers acknowledge that outdated infrastructure is limiting fraud detection. Manual reviews remain common. And while most agree that AI is key to staying ahead, adoption is still low.
Given that 53% of insurers believe better fraud prevention would speed up legitimate payouts, insurers risk falling behind if they don’t invest in new tools. By partnering with technology providers that embed AI-powered protection, insurers can benefit from smarter, automated fraud defence without additional overheads.
Chapter 3: Building the connected insurance ecosystem
59% of insurers say they are likely to implement end-to-end customer journey visibility by 2030
Customers now expect protection to fit seamlessly into their lives, from adding cover when booking a flight to receiving a claim payout within moments. That’s why many insurers are prioritising end-to-end customer journey visibility (from the initial policy agreement to the final claim payment). In doing so, they unlock faster claim payouts, better operational efficiency, and greater customer loyalty.
Finding 1: Legacy systems are holding insurers back
Outdated systems continue to limit insurers’ ability to meet rising customer expectations. Many recognise the need to digitise but are struggling to turn ambition into action. Those leading the charge are reframing payments as a catalyst for transformation rather than an administrative process.
“Before Adyen, we didn’t have the dashboards or visibility to know how we were performing day to day. We were operating in the dark.”
Insurers are increasingly aware of what’s at stake. More than half acknowledge they’ll lose customers if they don’t deliver faster payouts.
Encouragingly, the industry is making progress towards automation and digitalisation. 56% agree their organisation will soon be able to digitalise and streamline their payment systems, and 59% believe they’ll soon automatically adjust payments for policies, renewals, or claims.
However, legacy methods like cheques and bank transfers remain a persistent drag on efficiency.
Finding 2: Insurers need to rethink money movement
The next phase of digital transformation in insurance isn’t just about speed; it’s about smarter money movement. By linking every stage of the payment flow, from collection to payout, insurers will gain greater visibility, flexibility, and control.
This not only enables real-time payouts and embedded insurance at the point of sale, but it also lays the groundwork for long-term growth through automation, data-driven insights, and better customer engagement.
By integrating systems that can exchange data and funds, insurers will have a single, intelligent flow of money – from policy purchase to claim payout. This will allow them to:
Settle legitimate claims instantly while maintaining strong fraud controls.
Automate reconciliation and cash flow management.
Use payments data to anticipate needs, prevent fraud, and build deeper customer relationships.
Conclusion
Payments as an engine for innovation
Insurance is entering a new era.
The old model of siloed systems and slow processes is giving way to connected ecosystems where every interaction, from policy setup to payout, can happen seamlessly and securely.
This shift isn’t just about adopting new technology. It’s about redefining how insurers onboard customers, manage risk, and deliver value. By unifying payments, data, and compliance within a single system, insurers can unlock efficiencies that drive both customer satisfaction and long-term resilience.
The most forward-looking insurers see payments not as a utility, but as an engine for innovation. They connect every part of the business and power smarter, faster experiences for policyholders.
“Transformation never really ends. With Adyen, we’re building a platform that evolves with our customers.”