2025 marked a turning point for insurance payments. No longer back-office plumbing, payments became a strategic lever for growth and customer experience. As open banking in insurance matured, real-time rails gained traction, and regulatory and infrastructure accelerated change. Carriers were forced to rethink how they collect premiums, disburse claims, and manage cash flow.
Here are the biggest lessons from 2025, and why they should shape payment strategy heading into 2026.
#1 Instant and Real-time Insurance Payments are Now Table Stakes
A report published in March 2025 shows that 34.8% of consumers receiving insurance-related disbursements selected “instant payment” as their most-used method when given a choice. (PYMTS Intelligence & Ingo Payments, “Digital Transformation and Instant Payments Fuel Business Disbursements Efficiency, March 2025)
This trend was reinforced in late-2025 reporting: many policyholders now view payment velocity as a top priority when filing claims. (PYMNTS, “Open Banking Brings Insurance Industry Closer to Instant Payouts,” April 2025).
Why Real-time Payments in Insurance are No Longer Optional:
- Instant claims payouts help insurers deliver on the promise of “protect and pay quickly,” strengthening trust during stressful events.
- Faster premium collections and immediate confirmation can improve cash flow, reduce Days Sales Outstanding (DSO), and simplify reconciliation.
- For carriers stuck on batch-based systems or traditional rails, the gap vs modern, digital-first competitors is widening rapidly.
#2 Payment Flexibility is Essential for Growth
2025 reinforced that customers expect flexibility. The broader payments landscape, including bank transfers, digital wallets for policyholders, push-to-debit, and real-time instant deposit, is increasingly influencing how people expect to manage funds. (PYMNTS, “Slow Claims Payouts Push Insurance Policyholders to Switch Carriers,” November 2025) For insurers operating across regions or offering multiple product lines, this fragmented landscape means sticking with a single payment method is no longer acceptable.
Why Payment Flexibility Shapes Loyalty:
- Offering a variety of payment options (open banking, wallets, and instant deposit) improves accessibility and meets customer expectations.
- Flexibility helps support cross-border or global operations or shifting customer demographics.
- Positions insurers competitively, especially if embedded-insurance and fintech-driven models proliferate.
#3 Payment Interactions are Now a Strategic Touchpoint Throughout the Customer Lifecycle
In 2025, many carriers reimagined payments as more than accounting. Payments became deliberate touchpoints in the customer journey: at policy inception, billing, endorsements, renewals, and especially during claims. (PYMNTS, “Instant Payouts and Smarter Credit Give Payments a Thankful 2025,” November 2025)
Where carriers invested in orchestrated payment flows, flexible billing schedules, and clear communication around disbursements and premium collection modernization, they saw improved customer satisfaction, fewer failed payments, and stronger retention.
Why Payment Interactions are a Strategic Touchpoint:
- Payment experience affects brand perception, trust, and whether customers stay after a claim (or renew at policy term).
- Smooth, transparent payment flows reduce friction, billing errors, disputes, and operational overhead.
- Payments become an opportunity for engagement rather than a back-office afterthought.
#4 Regulatory and Infrastructure Shifts Raised the Bar for Payment Systems
In 2025, regulators and payment infrastructure providers accelerated reform. For example, in the UK, the Financial Conduct Authority (FCA) published new safeguarding rules for payment and e-money firms (in “PS25/12”), which are due to take effect in 2026. This means insurers using e-money firms or fintech partners will need to adapt.
At the same time, the Bank of England (BoE) mandated adoption of the richer data standard ISO 20022 for certain large-value payments (e.g., through CHAPS) from May 2025 onward, signaling that payments with richer data, structured fields and better traceability are now the norm. (Bank of England, speech at Pay360 on ISO 20022 adoption, March 2025)
Why Accelerated Reform Impacts Payments:
- Legacy or rigid payment systems may fail compliance or struggle with reconciliation when richer data and safeguarding rules become standard.
- Insurers need payment platforms that are flexible, compliant, and able to evolve with regulation, to avoid operational or reputational risk.
- As payment rails evolve, insurers with future-proof systems will be better positioned to support new methods (open banking, wallets, stablecoins) as they emerge.
#5 Technology Alone is not Enough. Alignment of Systems, Process, and Culture is Foundational
2025 underscored that simply layering modern payment rails over legacy infrastructure is not sufficient. Carriers that saw real benefits paired technology upgrades with process redesign and organizational alignment. That meant coordinating billing, treasury, claims and customer-service teams under a unified payments strategy and not letting payments remain siloed.
Where this alignment occurred, carriers saw improved efficiency, fewer failed payments, quicker disbursements, cleaner reconciliation, and better customer service.
Why a Unified Payments Strategy is Key to Innovation:
- Billing, claims, and treasury workflows under one orchestrated platform eliminate complexity, minimizing failed payments.
- Cleaner processes and faster payouts translate into improved policyholder satisfaction and loyalty.
- Carriers can adopt new payment methods, such as open banking, wallets, and stablecoins, without disrupting operations.
#6 Unified, API-driven Payment Orchestration Platforms Emerged as Strategic Infrastructure
One powerful lesson from 2025: adopting a modular, API-first payments stack rather than discrete tools (card gateway, bank-transfer processor, e-money wallet), provided carriers with agility, scalability, and resilience.
Embedded finance, orchestration, unified routing, and real-time capabilities matured enough to be considered reliable infrastructure.
Why Payment Orchestration for Carriers Beats Discrete Tools:
For insurers, this means payment systems can integrate more cleanly with policy administration, billing, claims systems — and adapt quickly as payment methods, customer expectations, or regulations change.
- Payment systems can integrate more cleanly with policy administration, billing and claims systems.
- Carriers stay compliant as regulations evolve without disrupting operations.
- Carriers can adapt quickly as payment methods and customer expectations change.
From Lessons to Payments: The Future of Insurance Payments 2026
2025 demonstrated that payments are no longer a secondary concern for carriers; they’re a core part of competitiveness, customer experience, and operational resilience. Carriers that moved early to adopt instant payments, flexible methods, orchestration, and compliant infrastructure gained advantages in claims speed, billing efficiency, customer satisfaction and risk mitigation.
But the transformation is far from done. As 2026 approaches, regulatory regimes (safeguarding, data, global payment standards), evolving payment rails, changing customer expectations, and growth in embedded-insurance and global business will place even more pressure on carriers’ payment strategies.
Now is the time for insurers to treat P&C insurance payment solutions as a foundational pillar of their business.
Our upcoming whitepaper, “Payment Trends in 2026: What Carriers Should Prepare For”, will detail the strategic imperatives, technology investment priorities, vendor-selection guidelines, and a roadmap to embed payments across the full insurance lifecycle.
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