In today's insurance market, policyholders have more choices than ever. Switching providers is quick, easy, and often encouraged by comparison tools and challenger brands. And while price has traditionally been the battleground, it's now only one part of a much bigger picture. According to new research from Nuvei, nearly half of policyholders who switch insurers do so for reasons unrelated to cost.
At the center of this shift lies the claims experience, and more specifically, the speed and flexibility of payouts to customers.
Why faster payouts are the future of customer loyalty in insurance
For many policyholders, filing a claim comes during moments of stress or financial uncertainty. They expect insurance to provide reassurance, yet many are met with delays, outdated processes, and inflexible options. Long wait times, lack of transparency, and rigid payout options erode confidence—often permanently. In fact:
- The average claim lifecycle exceeds 100 days, while most policyholders expect significantly faster resolutions.
- 48% of policyholders say they would pay more for a faster payout, proving that speed isn't just convenient—it's valued.
- Only 35% of claimants receive direct deposit payouts, despite 58% saying it's their preferred method.
These delays can seriously affect customer satisfaction. A slow payout undermines confidence in an insurer's ability to deliver when it matters most. With 40% of policyholders switching providers annually, that perception can be costly.
How flexible payouts can give insurers an edge in a highly competitive market
Flexibility is increasingly essential. Policyholders want to choose how they receive their funds, whether that's a real-time bank transfer, digital wallet, or scheduled installments for larger claims. Meanwhile, 18% were still paid by check, introducing additional wait times and banking steps.
When insurers fail to provide this flexibility, frustration builds. The result? 19% of claimants report struggling to access their payout, reinforcing the belief that claiming is more hassle than help.
Meanwhile, digital-first insurers are raising the bar. With streamlined onboarding, transparent communication, and instant payouts built into their platforms, they're capturing market share from traditional providers who haven't kept up.
To stay competitive, insurers must stop viewing payouts as a back-office function and start seeing them as a core part of customer experience and retention.
The bottom line?
Faster, more flexible payouts build trust. They increase satisfaction. Ultimately, they give insurers a lasting edge in a market where loyalty is harder than ever to earn.
Discover more insights, data, and strategies in Nuvei’s latest whitepaper: “Mind the Claims Gap – Why UK Policyholders Are Losing Faith in Insurance Products, and How Payments Can Fix It.”
