Adyen Finds Average Value of Fraudulent Claim is £84,000

Insurance companies are confronting fraudulent claims that average £84,000 per incident, according to research from Adyen. The payment platform's 2025 Insurance Report reveals that one in seven claims submitted to insurers proves to be fraudulent.

The research shows that 90% of insurance businesses estimate fraud accounts for an average of 2.6% of annual revenue, with losses reaching 5% at some firms. Fraudulent activity includes staged accidents and inflated claims, according to the findings.

“Legacy systems are eroding insurers' margins,” says Adrian Davis, Commercial Leader for Financial Services and Insurance at Adyen. 

“Many still rely on cheques and bank transfers, slowing payouts and frustrating customers who expect instant service. Meanwhile, AI-driven fraud is exploiting these outdated systems.”

AI complicates fraud detection

More than half of insurers say fraudsters' deployment of AI has made attacks harder to prevent, the research finds. 

The report identifies that 53% of insurance companies acknowledge their legacy payment infrastructure limits fraud detection capabilities, while 52% continue to depend heavily on manual claims processing.

Davis notes that insurers can address these challenges through modernisation. "By adopting real-time, embedded payment solutions, insurers can automate verification, speed up legitimate claims, and deliver the seamless experience customers expect," he says.

The sector recognises that current systems leave firms vulnerable as fraudsters deploy increasingly sophisticated AI-driven attacks. Insurance companies indicate they need to embrace advanced AI capabilities to counter emerging fraud threats, according to the report.

Payout delays drive customer debt

The research identifies a parallel problem affecting customer finances. 22% of consumers report going into debt while waiting for claim payouts, with the issue most pronounced among younger policyholders. The data shows 36% of Gen Z and 31% of Millennials borrow money while awaiting insurance funds.

Payout delays are damaging insurer relationships with customers. Fifty-eight percent of insurance companies acknowledge that slow claim processing drives customer churn, according to the findings. 

Both insurers and consumers agree that the typical payout period of one to four weeks fails to meet current expectations for speed and convenience.

The financial impact on consumers extends beyond inconvenience. Policyholders who experience delays may need to use credit cards or personal loans to cover expenses that insurance should address, creating additional costs through interest payments.

Infrastructure modernisation required

Looking ahead, 58% of insurers identify meeting customer demand for instant claim payouts as a primary challenge over the next five years. The report suggests that reimagining money flows across the insurance value chain can reduce friction between purchase, claim and payout processes while improving fraud risk management.

The research indicates that effective responses require infrastructure upgrades enabling fraud detection to integrate directly within payout processes. Insurance companies need systems that allow seamless integration to match customer expectations formed by experiences in retail and fintech sectors.

"Today's policyholders judge insurers by how quickly money moves, not just whether it moves," says Adrian. "This gap is an opportunity for innovation."