Insurance payouts made via instant payments reached $227 billion last year

Insurance payouts - A person paying someone else

Insurers sent about 20 percent of all payments to policyholders using this digital method.

Last year, nearly one in five consumers received insurance payouts at least one time, and among those 49 million policyholders, a larger number than ever before received the funds via instant payments.

That meant 2022 represented the third consecutive year of increases for the use of this method of payments.

The rising interest in and use of instant insurance payouts indicates that insurers will be increasingly required to provide customers with options from which they can choose for receiving their money. Insurers who choose not to provide those options will fall behind competitors whose disbursement experiences better meet the expectations of consumers.

Insurance payouts - Report - Blocks

A recent report titled “Insurance Disbursements Brief 2022,” and that was issued by Ingo Money and PYMNTS, 2,421 consumers were surveyed regarding their preferences for receiving payments. The goal was to help identify the preferences and interest consumers have for various types of disbursement.

The research found that consumers want to be able to choose instant insurance payouts to an increasing degree.

Among the survey respondents, 24 percent said that they had received at least one instant disbursement from an insurer. A larger number received this type of payment last year than had ever been the case. There were an estimated 12 million people who received at least one instant payment. In auto and life insurance, instant payment rails have become the most common method used for claim disbursements.

In fact, consumers liked this method so much that they were willing to pay fees in order to receive them last year. About 45 percent of policyholders who received payments from health insurers last year were willing to pay a fee in order to receive it via instant disbursement. As high as this figure was, it was 51 percent lower than it had been in 2021. The figure was similar for both property and casualty claims. In that category, 45 percent was willing to pay more for instant insurance payouts in 2022, but it was 53 percent in 2021.

This type of disbursement is becoming central to the industry and usage continues its growth every year. Consumers are coming to expect instant insurance payouts as a standard offering instead of one associated with a premium. Insurers intending to remain competitive, says the report, must ensure they’re meeting the expectations of those consumers or risk losing customers to rivals who do.

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