British travellers had a rough 2024. The Association of British Insurers (ABI) reports that its members settled more than 500,000 travel insurance claims, paying out £472 million - one of the highest annual figures on record. The majority involved a policyholder who had to cover costs upfront: a medical bill paid on a personal credit card in a foreign hospital, an emergency hotel booked on the spot, a replacement flight purchased in a hurry.
For assistance companies - coordinating evacuations, arranging medical care, securing accommodation in real time - the pressure to get funds to people quickly is even more acute. Delays are not just an inconvenience. They are a failure of the core promise. Virtual cards are changing that, giving travel insurers and assistance companies a fundamentally different approach to disbursement: one that delivers immediate peace of mind to policyholders while keeping full control in the hands of the organisation issuing the funds.
In this article, we look at why the traditional disbursement model is failing travellers, what virtual cards change in practice, and what travel insurers and assistance companies should look for when evaluating their payment infrastructure.
The reimbursement model places the entire financial burden on the person least equipped to carry it. A policyholder who falls ill abroad pays the hospital, keeps the receipt, returns home, completes the claim form, and waits weeks for a bank transfer. A 2024 survey by Sollers Consulting and Ipsos found that 63% of UK insurance customers rank fast claims handling as their top priority after making a claim - prioritising speed above the amount of compensation received. Medical expenses were the most common travel insurance claim type in 2024, accounting for 34% of all claims and £262 million in payouts, with an average medical claim of £1,528. These are not small sums to absorb upfront, particularly when incurred abroad and under stress.
For assistance companies, the challenge is sharper still. Unlike insurers who reimburse after the fact, assistance providers must act in real time - arranging hospital transfers, securing accommodation, coordinating repatriation. The payment infrastructure needs to match the urgency of the service.
Bank transfers are the most common payout mechanism. They are also slow, irrevocable once sent, and offer no visibility into how funds are used after they leave. Fake receipts and inflated claims are harder to detect after funds have moved. And for assistance companies coordinating payments directly with hospitals and service providers, traditional methods offer none of the real-time control that complex operational scenarios demand.
The FCA's December 2025 response to the Which? super-complaint on home and travel insurance confirmed that claims handling quality remains a top regulatory priority - announcing an expanded review of claims handling arrangements with explicit focus on customer outcomes and the governance of outsourced claims functions.³ Improving the speed and quality of disbursement is no longer optional.
In the claims disbursement context, a virtual card functions as a branded virtual claim card: a unique Mastercard/Visa card number generated instantly at the point of claim approval, configured with spend limit, merchant category restrictions, and validity window, then delivered directly to the policyholder's mobile device. It is purpose-built disbursement infrastructure that gives the insurer or assistance company precise control over how, where, and for what funds can be used - while giving the policyholder immediate peace of mind.
Rehana Mitha
Managing Director
Edenred Payment Solutions
Immediate funds access, without paperwork
A policyholder receives their virtual card details via SMS at the moment the claim is approved, adds it to their mobile wallet, and pays immediately - in-store or online, in any country, in any currency. No upfront cost. No forms. No waiting. For a traveller dealing with a medical emergency abroad, the peace of mind that comes from having funds available instantly, without paperwork, is as significant as the funds themselves.
Fraud prevention at the point of payment
Merchant Category Code (MCC) filtering - a mechanism that restricts each card to transactions at specific merchant types - configures each card to permit spend only at merchants relevant to the claim. A medical expenses card is declined at unrelated categories automatically. Fraud is prevented before it occurs, not detected weeks after it has settled.
For assistance companies paying service providers directly, the same controls apply: each payment is tied to a specific case with spend parameters set to the exact transaction value and merchant type. For the insurer or assistance company, that combination of pre-set controls and real-time visibility provides genuine peace of mind alongside the operational efficiency gains.
Real-time control and intervention
Delegated Authorisation gives claims teams the ability to block, modify, or extend a card's parameters in real time - before a transaction settles, rather than after. A claims agent can increase a limit if a medical situation escalates, restrict spend if something looks wrong, or cancel a card entirely. None of this is possible with an irrevocable bank transfer.
Reconciliation and portal access
Each claim receives a unique Virtual Card Number, linking every transaction automatically to its claim file with merchant identity, amount, and timestamp - no manual matching required. Agents issue cards directly through a dashboard within centrally defined parameters, with no separate approval chains and no delay between claim decision and funds access. A lean funding model means no pre-funding of individual cards, keeping working capital where it belongs.
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
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Traditional disbursement (bank transfer/cash advance) |
Virtual card disbursement |
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Speed of funds access |
Days to weeks after claim approval; policyholder out of pocket in the interim |
Funds available instantly at the point of claim approval, via virtual card |
|
Fraud control |
Reimbursement model relies on receipt submission; fake or inflated receipts difficult to detect |
Spend controls and MCC filtering restrict funds to relevant merchants only; fraud prevented at the point of transaction |
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Intervention |
Bank transfers are irrevocable once sent; recovering funds after fraud is slow and uncertain |
Real-time blocking or modification via Delegated Authorisation before funds leave |
|
Spend visibility |
Limited; insurer cannot see how funds are spent after transfer |
Transaction-level data by merchant, amount, and timestamp; full visibility throughout |
|
Reconciliation |
Manual matching of receipts, bank transfers, and claim records; time-intensive |
Unique VCN per claim links every transaction automatically to the claim file |
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Policyholder experience |
Stressful; upfront costs, paperwork, waiting for reimbursement |
Immediate relief; no out-of-pocket expense, no forms, usable in-store and online worldwide |
A September 2025 Juniper report identified virtual cards as the fastest-growing B2B payment channel globally over the next five years, projecting a 370% increase in transaction value and singling out healthcare and travel as leading verticals. The regulatory and competitive direction for travel insurers and assistance companies is clear. The question is how quickly individual organisations replace a disbursement model built for a different era.
✔️ Instant issuance at the point of claim approval
Card generation should trigger automatically or through a single agent action at the moment of approval. Any delay between approval and card delivery undermines the core value.
✔️ MCC filtering configurable by claim type
A medical expenses card should work at hospitals and pharmacies; an emergency accommodation card at hotels. Filtering must be configurable per card and per use case, not applied as a blanket restriction.
✔️ Delegated Authorisation for real-time intervention
Modifying, blocking, or extending a card before a transaction settles is what distinguishes this from a faster bank transfer. Once a bank transfer has moved, it cannot be recalled.
✔️ Mobile wallet delivery
Delivery via SMS with a direct link to add to an existing mobile wallet - no app download, no registration - is the difference between instant access and a process when a policyholder is abroad and under pressure. Web Push Provisioning takes this further, enabling the virtual card to be pushed directly into a policyholder’s mobile wallet without requiring any action on the policyholder’s part at all - the card simply appears, ready to use.
✔️ Unique VCN per claim
One card per claim is the architecture that makes automated reconciliation possible. Shared card numbers across claims replicate the same manual overhead as traditional methods.
✔️ Portal access and a lean funding model
A dashboard within centrally defined parameters removes approval bottlenecks; a lean funding model eliminates per-card prefunding overhead.
✔️ Branded card experience
A policyholder who receives a branded virtual claim card experiences the payout as a deliberate act of care rather than an anonymous bank transaction. That distinction drives the kind of brand engagement that translates into loyalty at renewal - a meaningful competitive advantage in a market where claims experience increasingly determines who policyholders stay with.
The travel insurance and assistance sector faces pressure from multiple directions: policyholders expecting faster, more transparent claims experiences; the Financial Conduct Authority (FCA) intensifying its scrutiny of claims handling quality; and claim volumes - £472 million settled by ABI members in 2024 alone - that are not diminishing. Virtual card disbursement addresses the most visible failure point directly: the gap between a claim being approved and a traveller having access to funds. That gap is where trust is lost.
For travel insurers and assistance companies, closing it is not just a compliance imperative. It is a competitive one. Those that modernise their disbursement infrastructure now are building policyholder relationships and a claims capability that will only become more valuable as the regulatory environment tightens and traveller expectations continue to rise.
Edenred Payment Solutions provides virtual card issuing and payment infrastructure purpose-built for the insurance and assistance sector. Get in touch with our team to find out how we can enable instant card issuance, real-time monitoring, and automatic reconciliation for your business.