By Lena Hackelöer, Founder and CEO of Brite Payments
Insurance exists to protect people in moments of need, yet the process of receiving that protection can often add to their stress. Whether a customer faces an accident, illness or even property loss, the path to receiving a payout can sometimes feel slow, confusing, and uncertain.
Insurers, too, face real challenges as many operate on legacy systems designed for batch processing rather than real-time transactions. These systems require complex reconciliations, manual claims handling and time-intensive compliance checks. This often results in a lack of transparency for customers and higher operational costs for insurers, and inefficient processes have been shown to increase the cost of acquiring a new customer by as much as 30%.
However, we can see that the industry is not standing still. Across the sector, insurers are rethinking payments as a strategic lever rather than just a back-office function. Customer expectations, shaped by digital banking, fintech, and eCommerce, are accelerating this change. People now expect instant and seamless transactions in all aspects of their financial lives, including insurance.
Neo-Insurers: Building Loyalty Through Instant Payouts
Digitally native insurers have had the advantage of starting fresh, with modern technology at the core of their offering. They have made instant payments an important part of their value proposition, proving that claims don’t need to be synonymous with delays.
Take the example of a traveller abroad who experiences a medical emergency. With traditional systems, reimbursement might take weeks; however, a neo-insurer can often deliver the payout on the same day the claim is validated when using instant payouts. For the customer, this removes immediate financial worry and creates a sense of relief and trust.
Instant payments are an extension of the insurer’s promise to be there when needed most. For insurers, automated instant payout processes also reduce manual handling and errors, while creating a streamlined experience that resonates strongly with digitally savvy customers.
Insurtechs that have adopted instant payouts report improved Net Promoter Scores (NPS) and stronger retention. By turning what was once a source of frustration into a moment of reassurance, neo-insurers show how payments can directly influence loyalty and long-term brand value.
Traditional Insurers: Embracing Modernisation Without Disruption
Established insurers face a different challenge. It is challenging to discard decades of investment in legacy systems and rebuild from scratch; however, modernising does not require a full-scale replacement. Instead, traditional insurers can integrate instant payment solutions alongside existing processes, creating hybrid systems that bring the best of both worlds.
One pragmatic approach is to introduce instant payments for lower-value or straightforward claims, such as minor travel or property reimbursements, where automation can safely reduce administrative burden. Customers get their money faster, staff are freed up to focus on complex claims, and the overall efficiency of operations improves.
Transparency is another key benefit. By allowing customers to track the progress of their payout, traditional insurers can reduce incoming queries and strengthen customer confidence. In fact, even incremental steps toward faster and more visible payments can have a meaningful impact on customer satisfaction.
Importantly, integrating instant payments does not mean compromising compliance. With the right systems, insurers can meet KYC, AML and reporting requirements while accelerating payout speed. In many cases, advanced payment solutions enhance compliance by embedding real-time verification checks into the process, providing reassurance for both insurer and customer.
The Universal Benefits of Instant Payments
Whether a company is a digital-first entrant or an established market leader, the benefits of instant payments are consistent.
Surveys show that customers increasingly expect their insurers to process claims quickly, and when those expectations are met, satisfaction, trust, and loyalty rise. These are not abstract benefits but instead directly reduce churn in a highly competitive market.
From an operational perspective, real-time payment settlement significantly reduces the risk of duplicate or parallel fraudulent claims being paid. Coupled with strong customer authentication tools such as biometrics, instant payment processes make it far harder for fraudulent claims to slip through.
Finally, and most importantly, instant payments strengthen brand perception. Customers talk about their experiences, especially in moments of crisis. An insurer that delivers funds instantly when they are needed most creates stories of trust and reliability that ripple outward, supporting marketing and reputation in ways that traditional advertising cannot.
The Future of Insurance Payouts is Instant
The insurance sector is on the edge of a meaningful shift where payments are emerging as a critical differentiator. Customers no longer accept delays, opacity and stress. They expect instant, transparent and seamless experiences, and insurers, whether digital disruptors or established giants, must deliver.
Neo-insurers are showing what can be achieved when speed and transparency are embedded from the outset. Traditional insurers are proving that modernisation can be achieved without disruption, through carefully targeted integrations. Both approaches are contributing to the same outcome: an industry that is becoming faster, more efficient and more customer-centric.
Instant payments are quickly emerging as the expected standard. They represent not just a technological upgrade, but a new way of defining the insurer customer relationship. Claims no longer need to be a friction point; they can become a differentiator that demonstrates reliability and care.
