Outdated payment systems and manual processes limit insurers’ detection of fraud, which features in up to 24% of claims, Dutch payment group Adyen warns.

A fraudulent claim typically costs $100,000 to $205,000, and scams frequently cost up to 5% of annual revenue, it says.

Yet more than half of insurers still rely on manual processes and outdated infrastructure that hampers efforts to combat the issue, according to Adyen’s Insurance Report 2026.

One in three still rely heavily on manual fraud reviews and 77% do not support digital wallets.

Adyen says fraud prevention controls that are too rigid also “end up punishing genuine policyholders by slowing claim payouts.  

“It needn’t be that way. Consumers (especially younger ones) understand the security trade-off needed to receive faster claim payouts.  

“In fact, many are happy to undergo additional authentication if it means they get their money faster.

“By partnering with technology providers that embed AI-powered protection, insurers can benefit from smarter, automated fraud defence without additional overheads.”  

AI detection tools can prevent fraud before it happens and allow insurers to pay legitimate claims faster and with greater confidence, it says.  

About one-third of those polled by Adyen already use AI-based fraud detection, but a similar proportion still dedicate significant resources to manual fraud reviews.

“Australian insurers are pouring resources into AI, fraud prevention and digital experiences – yet legacy infrastructure may be holding them back,” Adyen said.

“Insurers know their fraud controls are standing in the way of better customer experiences. Extensive checks and slow claim payouts can cause serious financial strain for customers.

“Many customers are happy to jump through more security hoops if it means faster payouts.”

Adyen recommends “delegated authentication” and says its tools recognise returning authenticated customers. Insurers can also securely access verified bank data to support underwriting decision-making.

“By integrating systems that can exchange data and funds, insurers will have a single, intelligent flow of money – from policy purchase to claim payout.  

“This will allow them to settle legitimate claims instantly while maintaining strong fraud controls.”

See the report here.