Article
How modern payments reduce risk for insurers
Payment failures and compliance gaps are putting pressure on legacy infrastructure.
Risk management is top of mind for insurers, and for good reason.
Failed transactions and involuntary churn aren’t just lost revenue. They expose insurers to continued liability during policy grace periods, administrative costs for reinstatements, and increased adverse selection.
Add regulatory requirements, like anti-money laundering (AML) checks, and the margin for error narrows fast.
But there’s also risk in standing still. Legacy payment platforms struggle to keep up with customer expectations and digital-first competitors.
“Many insurers have a payments blind spot,” says Adrian Davis, Adyen’s Commercial Leader of Financial Services and Insurance. “They don’t realize that modernizing online payments could drive significant benefits for their business.”
The payments blind spot
Traditional insurers hesitate to modernize their payment stack, fearing operational disruption.
That said, outdated systems bring their own set of challenges. They’re slow to adopt regulatory changes, hard to innovate with, and difficult to scale.
“Wholesale transformational change in legacy insurance is undoubtedly tough,” Adrian acknowledges. “But modernizing your payments can be achieved quickly, with an immediate payback.”
Smarter payments, better outcomes
Being risk conscious is smart, but legacy systems can’t meet today’s demands.
As InsurTechs gain ground, the decision to move becomes strategic – not optional.
"Insurers should seize the opportunity and implement intuitive, flexible payment experiences to stand out in a crowded online marketplace,” says Peter Neufeld, EMEIA Innovation, Experience Design, and Business Transformation Lead at EY.
They can close the gap by modernizing their infrastructure.
That starts with making every transaction more reliable. When payments succeed the first time, insurers see better customer retention and fewer follow-ups. With tools like tokenization, auto retries, and real-time payment status, it’s easier to increase authorization rates and prevent involuntary churn.
Staying compliant becomes easier too. With regional data isolation, end-to-end encryption, and regulatory support, insurers can meet industry rules without increasing overhead.
And Adyen’s in-house set up means fewer vendors, faster performance, and the ability to scale. Whether adding a new payment method or pay-out option, our platform adapts with you.
Modern payments won’t just reduce risk, they’ll drive growth.
