As digital natives who've grown up tethered to smartphones and social media, the Gen Z population's effect on today's consumer trends is well documented. Young shoppers' demands for instant gratification in consumer transactions have ushered in an era of in-app shopping, next-day shipping, and fast, friction-free digital payment options.
Gen Z's influence is extending to the insurance claims process, as well. More and more, Gen Z's preferences are pushing the industry to uplevel its claims experience – to make it faster, more convenient, more tied to mobile, and more transparent to the policyholder. InvoiceCloud's 2026 Claims Experience survey of 1,000 U.S. policyholders shows Gen Z is nearly twice as likely as the overall population to prefer a digital wallet for claims payments (13% versus 7%).
Recent research shines a light on policyholders' discontent with what they identify as their biggest deal breaker: an unacceptably slow process for paying claims.
The InvoiceCloud survey found that only 9% of policyholders received their claims payment within two days. Meanwhile, a quarter of respondents say it took more than a week to receive their claims payout, while an unfortunate 13% waited "several weeks" to get these urgent funds.
This could cause ripple effects. In a 2022 report, "Transforming claims and underwriting with AI", Accenture estimated that poor claims experiences could put up to $170 billion in global insurance premiums at risk through 2027. The InvoiceCloud survey shows how these risks could materialize. At least 75% of policyholders surveyed say they would consider switching carriers after a single negative claims experience. That's a high percentage in any field, but it's particularly high in personal-lines P&C, where switching providers is often easier than it is in commercial, E&S, or other specialty markets.
Improving the claims process
How do insurance carriers improve the claims process? Our research found that speed and transparency matter most of all to policyholders. When asked directly, 30% named a faster claims payment after approval as the single change they want most, more than any other option, while 22% preferred clearer status communication. Gen Z echoes that second point: 24% named clearer, more consistent communication about payment status as the one change they would make, on par with the 21% who named faster payment.
Another issue: Many carriers have modernized inbound premium payments, but outbound disbursements still rely on paper checks and manual processing. Paper checks create fraud risk, delivery problems, and extra work for commissions and return premiums.
The next generation of policyholders is demanding two changes to this payment structure. They prefer a shift to digital, and they want choices.
Digital disbursement platforms can support a wide variety of options including ACH/direct deposit, debit cards, virtual cards, and digital wallets. Direct deposit to a bank account is policyholders' favorite payout, preferred by 52% of respondents, more than all other options combined. Printed checks still account for 19%, likely reflecting legacy carrier processes rather than genuine preference. The gap between generations is wide: 32% of Baby Boomers prefer a printed check, compared with just 9% of Gen Z.
If slow payouts can lead to defections, digital insurance payments can operate as a retention tool.
Insurance carriers can do this by ensuring this critical touchpoint becomes an easy experience end-to-end, from allowing policyholders to self-serve through digital premium payments, paperless billing, and automatic payments, to instant disbursements delivered however policyholders prefer to receive funds.
Real-time digital disbursements are funds sent electronically and received quickly, without a paper check in the middle. For insurance carriers, this means agent commissions and return premiums move through digital payment processing solutions rather than the mail. More importantly, it means getting funds into policyholders' hands fast, when it matters the most.
Raising expectations
As younger policyholders account for a larger share of the insurance market, experiences they've grown accustomed to in other walks of life will increasingly become expectations for insurance as well.
For many, this translates to being able to complete more transactions on smartphones. Digital payments enable customers to choose a payment method from their phone, receive payment notifications, track payment status, access transaction details, and receive funds directly into an eligible account or wallet. That matters most to the youngest policyholders. When asked for the easiest way to access funds in an emergency, 19% of Gen Z chose a mobile wallet, compared with 5% of Baby Boomers, while only 9% would withdraw cash at a bank, compared with 34% of Baby Boomers.
Gen Z's imprint on insurance claims is becoming more pronounced. Today's policyholders want to have insurance claims processed and paid out faster. But they want more. They want the entire journey – culminating in how and when they get paid – to feel as immediate and seamless as any other digital financial transaction.
