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How digital transformation is reshaping insurance
Forget paper forms and cheques, here’s how digital-first insurers can win.
The insurance sector is undergoing a shift.
While customers expect digital-first experiences, legacy systems are the norm.
Case in point: Many insurers rely on bank direct debits, yet 92% of customers prefer credit cards, debit cards, or digital wallets for online payments.
“There’s a misalignment between what new payment technologies can do and what carriers think they can do,” says Chris Payne, EMEIA Financial Services Insurance Technology Leader at EY.
“The opportunity for insurers to improve customer experiences, differentiate themselves, and innovate in this space is vast.”
In this blog, we’ll look at what’s driving digital transformation in insurance and the benefits for those who embrace it.
3 insurance digital transformation trends
Insurance has often been seen as traditional and slow to change. We get it—we work in finance.
But with rising customer expectations and emerging insurtechs, three key trends are shifting that perspective.
#1: Digital is now the default
As Adam Fischer, Clearcover’s Chief Digital Product and Innovation Officer shares, “The advent of the smartphone changed overall customer behavior and what they expect out of their insurance carrier. There's an expectation that most (or all) interactions can be done digitally.”
In short: fast, seamless, and simple payments are the new standard.
#2: Gen Z and Millennials want smarter options
According to our report, 67% of 25-34 year olds like the idea of subscription-based insurance models. We also found that 65% prefer prepaid virtual cards to avoid being out-of-pocket during a claim.
The takeaway? Without digital transformation, you risk losing your future customer base.
#3: Pay-ins and pay-outs shape customer loyalty
Whether buying a policy or receiving a claim, delays cause frustration.
And customers are clear about what they want:
Using preferred payment methods instead of paper cheques.
Mobile-friendly and secure checkout options like Apple Pay.
Transparent, real-time updates on claim progress.
Quicker access to cash from claims.
Poor payment experiences lose trust, fast.
3 benefits of digital transformation in insurance
For risk-averse insurance leaders, a digital transformation can be seen as too complex or time-consuming.
“Modernising your payments can be achieved quickly,” says Adrian Davis, Commercial Leader of Financial Services and Insurance at Adyen.
“We recently onboarded one of the world’s biggest insurers and within 48 hours we were live; processing pay-ins and pay-outs.”
When backed by the right financial technology platform, digital transformation offers three key benefits:
#1: Better customer experiences
From onboarding to claims, customers want convenience and personalisation throughout the entire lifecycle.
With digital-first tools, insurers can:
Win new customers with seamless checkouts.
Simplify and speed up pay-outs with virtual card issuing.
Stay ahead of customer expectations and trends with real-time insights.
#2: Lower costs
Digital transformation isn’t just about customer experience; it’s about cost savings too. With Adyen’s single platform, insurance businesses can:
Consolidate systems and reduce operational overhead with automated money movement.
Streamline processes and increase accuracy with consolidated reconciliation.
Improve policyholder lifetime value (LTV) with features like auto rescue to prevent involuntary churn.
#3: Stronger claims leakage and fraud prevention
Smarter payment tools mean faster, more secure claims management and processing. By issuing advanced solutions, like virtual cards, insurers can:
Reduce leakage by restricting payments to the approved claim amount.
Use spend controls to ensure funds are used for authorized goods or services.
Get full visibility of spending patterns to make informed decisions with data.
Moving insurance forward
Modern infrastructure lays the foundation for scalable, long-term growth.
With the right partner, insurers can improve customer experiences, unlock data insights, and stay competitive.
Ready to modernise your insurance offering? Get in touch.