“Catastrophic weather events have increased 5x over the past 50 years — with $112.6B in insured losses in 2024 alone.”
Insurance Information Institute & Aon

We’re no longer planning for the “100-year event.” In Property & Casualty insurance, the extraordinary has become ordinary.

In 2024, the U.S. recorded 81 major natural catastrophes, leaving thousands of families and businesses facing sudden upheaval. Yet while the need for relief has never been greater, the industry is still held back by outdated processes. The average claims cycle now stretches to 23.9 days — and it’s still rising.

When a family is displaced or a small business is forced to close its doors, waiting weeks for relief isn’t just inconvenient — it’s devastating. This is insurers’ true “moment of truth.”

Speed isn’t optional. It’s the difference between rebuilding trust and losing it.

What is the Cost of Payment Delay?

Every extra day a claim sits unresolved compounds risk, cost and frustration. For policyholders, delays feel like broken promises. For insurers, they chip away at profitability and expose the business to unnecessary risk.

  • Revenue leakage: Longer cycles mean higher administrative expense, more rework and a greater chance of litigation.
  • Regulatory pressure: States like California and Florida enforce strict timelines for acknowledging and settling claims. Missing deadlines risks fines and license scrutiny.
  • Reputation at risk: After Hurricane Ian, slow-moving insurers not only faced backlogs — they also suffered reputational fallout and higher customer churn.

“A single day of delay in claim payment can add weeks to ultimate resolution costs.” — Claims Journal

How is Retention Won or Lost in Claims?

Marketing may set expectations, but claims fulfill the promise. In a crisis, customers don’t remember your ad campaign — they remember how quickly you helped them get back on their feet.

The stakes are high: 87% of customers say their claims experience impacts their decision to renew. Even a modest 5% increase in retention can lift profits by 25–95%.

Speed and empathy are what matter most. Rapid digital disbursements ease financial shock, especially for catastrophe claimants with steep upfront costs. Transparent updates reduce stress, and clear next steps show customers you’re focused on their needs — creating loyalty that lasts long after the crisis has passed.

Where to start:

  • Send proactive claim communications at key milestones.
  • Offer payment choice with clear delivery times.
  • Gather feedback after claims to uncover friction points and improve the process.

Why are Digital Disbursements a Strategic Advantage?

Legacy systems, fragmented vendors and paper checks create friction at the worst possible moment. Digital disbursements flip that equation — improving both the claimant experience and the cost to serve. 

Traditional vs. Digital Payments

Digital payments aren’t just faster—they’re smarter. Here’s how they stack up against traditional methods:

Feature Traditional Payments Digital Payments
Avg. payment time 10–21 days < 5 days
Cost per transaction $5–8 $0.25
Customer satisfaction Moderate High
Fraud risk Double Reduced
Call center load High Low

The difference is clear. Digital payment solutions shrink cycle times from weeks to days, align with policyholders’ expectations and reduce risk with auditable controls. Payment disbursements become faster, cheaper, and more secure.

How Can You Balance Speed with Control?

“Instant” can’t mean “unchecked.” Customers expect fast payouts, but insurers must balance speed with compliance and accuracy.
What makes this possible:

  • API-first integration connects claims systems directly to payment platforms for real-time validation and status updates.
  • Choice architecture routes payments by type, size and risk to the right rail — instant, same-day funds or next-day.
  • End-to-end auditability ensures insurers can move quickly while still satisfying regulators and internal controls.
  • What good looks like: same-day funds for eligible payouts, centralized approvals and automated reconciliation and reporting for Finance.

How Can You Build Resilience for the Next Disaster?

CAT events are no longer exceptions — they’re the norm. Resilient insurers design ecosystems that can flex under pressure without breaking.

Checklist for resilient claims payments:

  • Surge capacity to handle a 10x spike in volume
  • Digital disbursements with clear SLAs
  • Tight integration with claims systems
  • Redundant partners to ensure continuity

Pro tip: Run annual CAT drills across Claims, IT, Finance and payment partners to stress-test your systems before the next disaster.

What’s an Executive Action Plan Look Like?

Resilience doesn’t happen overnight, but you can start building it today. The path forward is to move from Reactive → Resilient → Predictive.

  • Immediate (0–3 months): Audit claims payment SLAs and add time to payment as a retention KPI.
  • Near-term (6–12 months): Pilot automated claims processing and digital disbursements in high-volume regions and give customers more choice.
  • Long-term (12–18 months): Embed predictive models into workflows and scale to 10x claim volume within 48 hours.

For more on leading with speed and compassion, visit Zelis.com.