Global insurance companies are losing an estimated $1.14 million annually due to payment-related fraud, highlighting a growing vulnerability as digital and mobile payment methods become the norm. Experts warn that if transactional fraud is not identified promptly, it can escalate into larger claims-related fraud, compounding financial losses.
These findings were published in the Adyen Index: Singapore Digital Report, which analyses evolving payment trends in the insurance sector in the digital era. The report notes a significant generational shift in consumer payment behaviour. Generation Z and millennial consumers increasingly purchase insurance via mobile devices, placing pressure on traditional insurers that rely heavily on legacy payment systems. According to Adyen, 27% of insurers worldwide experience annual losses exceeding $1.14 million due to fraudulent transactions. This underlines the delicate balance insurers must strike between fraud prevention and ease of customer approval.
Adrian Davis, Commercial Lead for Financial Services and Insurance at Adyen, commented, “Many insurers underestimate the impact of payment systems on business performance. Modern payment processes not only reduce fraud risk but also enhance operational efficiency and can drive sales growth.”
Digital-first insurers are proving better able to meet rising customer expectations, whereas traditional companies, constrained by outdated infrastructure, face higher operational costs and slower adaptation. Recurring and subscription-based payments are becoming increasingly important: although less than 30% of insurers currently offer subscription payments globally, 79% plan to invest in such solutions within the next year.
Failed payments remain a major challenge. Outdated card information, insufficient funds, or technical errors can result in lost policies or unintended customer attrition. In Singapore, 89% of customers abandon a transaction if their preferred payment method is unavailable.
Customer Payment Preferences
| Payment Method | Customer Percentage |
|---|---|
| Credit Card | 59% |
| Debit Card | 49% |
| Digital Wallet | 48% |
Adyen recommends several solutions, including automated card updates, intelligent retry mechanisms, and tokenisation. For instance, HDI Seguros leveraged Adyen’s Real Time Account Updater and Intelligent Retry, boosting approval rates from 88% to 91% and generating an estimated $226,922 in additional annual revenue.
Modernising the insurance sector and adopting flexible payment solutions is increasingly seen not just as a competitive advantage, but as a critical safeguard against rising fraud losses in a rapidly evolving digital landscape.