Insurance companies worldwide are losing more than $1.14 million annually to payment fraud, with experts warning that unchecked transaction fraud can escalate into claims fraud if not detected early. The findings emerge from the Adyen Index: Singapore Digital Report, which examines the evolving landscape of insurance payments in the digital era.
The report highlights a significant generational shift in payment behaviour. Generation Z and Millennials are increasingly purchasing insurance via mobile devices, placing pressure on insurers still reliant on legacy payment systems that restrict options for customers. According to Adyen, 27% of insurance firms globally report annual losses exceeding $1.14 million due to fraudulent transactions, emphasising the delicate balance insurers must strike between fraud prevention and smooth customer approval processes.
Adrian Davis, Adyen’s commercial leader for financial services and insurance, stressed that many insurers underestimate the impact of payment systems on overall business performance. “Modernising payment processes not only reduces fraud risk but also improves operational efficiency and drives higher sales,” Davis explained.
Digital-first insurers are reportedly better equipped to meet rising customer expectations, whereas traditional insurers face higher costs and slower adaptation due to outdated infrastructure. The report notes that modernising checkout systems and offering a broader array of payment methods can enhance customer experience and improve conversion rates.
Recurring and subscription-based payments are also identified as a growing area of strategic focus. While fewer than 30% of insurers globally currently provide subscription payment models, 79% plan to invest in such options within the next year.
Failed payments remain a persistent challenge, often caused by outdated card information, insufficient funds, or technical glitches. Such failures can result in policy lapses and involuntary customer churn. Adyen’s research indicates that 89% of Singaporean consumers abandon online purchases if their preferred payment method is unavailable. Credit cards remain the most popular, chosen by 59% of respondents, followed by debit cards at 49% and digital wallets at 48%.
| Payment Method Preference | Percentage of Consumers |
|---|---|
| Credit Cards | 59% |
| Debit Cards | 49% |
| Digital Wallets | 48% |
Adyen recommends solutions such as automated card updates, intelligent payment retries, and payment tokenisation to recover failed payments and reduce manual processing. For instance, HDI Seguros implemented Adyen’s Real Time Account Updater and intelligent retry tools, raising its authorisation rate from 88% to 91%, resulting in an estimated $226,922 annual revenue gain—a 0.66% increase in approvals.
As the insurance sector evolves, adopting modern, flexible payment solutions is emerging as both a competitive advantage and a critical safeguard against escalating fraud losses.