Payments Define the Moment of Truth in Insurance Claims

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Insurance is often defined by its pain points: accidents, losses, disruptions and the frustration that comes with filing and settling claims. For policyholders, friction begins with paperwork, documentation and back-and-forth with adjusters.

Yet the most defining moment comes at the end — when the payout arrives. The speed, ease and flexibility of that payment can make the difference between a claimant who leaves and one who becomes a loyal customer.

Sarah Owen, chief product officer at One Inc, said that while the claims process has many moving parts, it’s the payment that ultimately cements how the customer feels. “You are sending pictures; you’re going back and forth with the adjuster. When you finally come to terms with the adjuster on what that claim amount is, you want that payment very fast.”

The urgency becomes even more pronounced in catastrophic events. Hurricanes, wildfires or large-scale flooding leave families displaced and businesses shuttered, making access to funds crucial. One Inc’s research with Celent underscored that urgency “The most extremely satisfied claimants in the overall catastrophic event were extremely satisfied with their claim speed,” Owen said. “So 56% of satisfied cat [catastrophic] claimants … are extremely satisfied with the claim speed. However, the dissatisfied clients, only 8% … were extremely satisfied with the claim speed.”

For carriers, that data shows the stakes clearly: When lives are upended, claims speed is not simply a metric, it is a lifeline.

While speed topped the list of satisfaction drivers, choice was not far behind. Consumers now expect the same optionality they enjoy in eCommerce, where digital wallets, cards and direct transfers are standard. Insurance is catching up.

“Only 42% of the claimants actually had payment choice,” Owen said. “Most likely [carriers] would just send them a check. However, what we found is those who were offered choice had a very positive experience. So those who reported that they had a choice in their payment actually said that 85% of those had an overall positive experience in their claim. And 50% of those said it was extremely positive.”

The data also revealed a retention risk. In the industry, NTUs — not taken ups — are claimants who decide not to renew with their carrier after a poor claims experience. Owen said the data shows that there’s been a high correlation between NTUs and the fact that they were not offered choice.

Consumers are familiar with digital wallets, and insurers are responding. Owen pointed to research showing 50% of U.S. customers have used digital wallets, while 81% have used PayPal. Within insurance, One Inc has seen traction: “Through our own clients and their claimants interaction with the platform, we found that 20% have used a digital wallet actually to pay premiums. So they’re getting very familiar with it.”

Insurers recognize the value of choice but face challenges in execution. Payments are already complex, with compliance and PCI standards. In insurance, regulations layer on top.

“With the Department of Insurance, and state by state Department of Insurance regulations, there are regulations around the speed of payment, how fast you have to get it. There are regulations around the choice of payments and just regulations on the whole process,” Owen said. For carriers, that means partnering with providers who know the landscape is essential.

For claims, the ability to direct payouts to PayPal, Venmo or Cash App gives policyholders immediate, flexible access.

Owen sketched out what she described as an “easiest, most streamlined scenario.” A customer sets up their policy with a preferred payment type — say, a debit card on file. After an accident, the adjuster finalizes the claim and asks if the payout should be sent to that same card. “And then all of a sudden we can push funds to their debit card and then they can see those funds near real time … this creates less stress and … a very positive claimant experience.”

Push-to-debit and similar capabilities are fast becoming hallmarks of the “perfect payout” model, reducing friction and stress while restoring normalcy more quickly.

Looking ahead, AI promises to shorten claims cycles from weeks to days or even hours. “If you get into a car accident, you can take a picture of the accident and … uploading that picture to your apps,” the carrier “can map that against all of the information that they have about all other accidents and determine quickly … what the amount of that claim would be,” Owen said.

For catastrophic events, drones and AI-powered analysis can assess damage, compare to historical data, and release emergency funds immediately. That speed, Owen said, helps claimants secure scarce resources such as contractors and materials before shortages extend recovery timelines.

At its core, the evolution of payments in insurance is about trust and retention. One Inc’s research showed a clear divide: Dissatisfied claimants often walk away, but positive experiences can foster deep loyalty.

“A loyalist is someone that when they go through this event with their insurance carrier, they have such a positive experience that they stay with the insurance carrier,” Owen said. For insurers, the message is direct: Payments are no longer a back-office afterthought. They are central to customer loyalty, competitive advantage and long-term profitability.

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