P&C insurers are investing heavily in customer experience: digital claims journeys, AI-powered underwriting, streamlined onboarding. But the most frequent and consequential customer interaction remains under optimized.
It's not claims. It's not onboarding. It's the monthly premium payment.
Sixty percent of personal auto policyholders pay their premiums monthly, making it the most frequent interaction most insurers will ever have with their customers, more frequent than renewal or claims. That frequency has measurable consequences: policyholders who pay through an insurer's mobile app are 21% more likely to say they would definitely recommend their insurer.
Celent’s new report The Payments Gap: How Do Consumers Want to Pay for Insurance?, commissioned by One Inc and based on surveys of more than 500 personal auto consumers and 53 insurers, identifies a clear gap between what policyholders want from the auto insurance payment experience and what insurers are prioritizing.
Two findings are worth examining before you read the full report:
Carriers and policyholders have different priorities when it comes to payments
There is a communications gap between them
When policyholders ranked the factors most important to their billing and payments experience, the results were clear:
Clear communication ranked in the top three for 80% of respondents
Flexible payment dates followed at 78%
Choice of payment method was rated important or very important by 82%
Insurers tell a different story. When asked the same question, they ranked failed payment resolution as a top priority, while policyholders placed it last. Insurers overestimate the share of policyholders who rank failed payments as their top concern by roughly a factor of ten.
This disconnect is worth unpacking carefully, because it doesn't mean insurers are wrong to focus on failed payments. A missed payment can trigger a lapse in coverage, which is bad for the customer and costly for the insurer. The operational priority is understandable.
But insurers experience this problem at a fundamentally different scale than individual customers do. A treasury team processing thousands of transactions feels non-sufficient funds rates and late payments as a relentless operational burden. The individual policyholder experiences a missed payment as an occasional inconvenience. As Celent notes, insurers' estimate of how much failed payments matter to customers reflects their own operational experience with the problem, not how often or how acutely customers actually feel it.
Celent is direct about the implications: in 2026, with so many payment options available, there is no longer a good reason for insurers to tolerate failed payments. Insurers whose payments still fail to transact are not meeting their policyholders’ minimum expectations.
The effect shows up directly in insurer roadmaps. Two of the top three planned improvements focus on completing transactions on time or reducing failures. Improving the overall policyholder experience ranks fourth. As the report notes, insurers remain too focused on successfully completing payments, when clarity and convenience should be top of mind instead.
The second finding points to a gap that may be faster to close, because it isn't primarily a technology problem.
Insurers already accept more digital payment options than their policyholders realize:
ACH is accepted by 92% of insurers, but only 72% of consumers believe their insurer accepts it
Mobile wallets are accepted by 71% of insurers, but only 50% of consumers believe that option is available to them
Celent identifies this directly as a communications issue: auto insurers need to do a better job of making clear what payment methods they accept.
For insurers who have already invested in expanding digital payment capabilities, this reframes the problem entirely. The gap between what insurers offer and what consumers use may not require new infrastructure to close. Customers simply may not know what’s available to them. The investment has been made. The customer benefit isn't being captured.
These two findings come from a report that runs considerably deeper. It breaks down payment method and process preferences by age and income, examines the channels policyholders prefer for billing communications and customer service, and provides a side-by-side comparison of insurer and policyholder priorities across every dimension of the payments experience.
Celent also addresses why the payments gap persists: technical complexity, operational cost, and the difficulty of accurate competitive benchmarking are all factors. And the report is direct about the path forward. Most insurers understand what their policyholders want. The challenge is that operational demands and legacy complexity consume the bandwidth that would otherwise go toward delivering it, and in some cases, toward seeing the problem clearly in the first place.
Closing the gap requires a deliberate shift in focus:
Prioritize clarity, flexibility, and convenience in the payment experience, the factors policyholders themselves rank highest.
Align investments with how customers actually experience payments, not only how insurers manage them internally.
Ensure that existing digital capabilities are visible and easy to access across every customer touchpoint.
Download the Celent report, The Payments Gap: How Do Consumers Want to Pay for Insurance? for a detailed picture of what today's personal auto policyholders want from their payments experience, and where most insurers are falling short.