Paying insurance claims overseas

What is the best way for a UK insurer or claims handler to pay claims in local currency overseas?

Convert from your side and pay the claimant in their own currency, by local transfer where possible. Then work through the same six checks on every overseas claim payment.

None of these needs to be worked out claim by claim. Most can be settled once, in the claims procedure and with the provider, and then applied to every payment.

Should we pay the claimant in their own currency?

Usually yes, once the settlement amount has been agreed in that currency. Pay the agreed figure in the currency of the claimant's account so nothing has to be converted at the receiving end.

A claim can involve three currencies: the currency of the policy, the currency the loss was suffered in and the currency of the claimant's bank account. A sterling policy covering a property in Spain may produce a loss valued in euros, paid to a claimant with a euro account. Where the policy and the loss are in different currencies, which rate converts one to the other is a matter for the policy wording and your claims team. We do not interpret policy wording.

Once the amount is agreed, state in the settlement letter the currency and the amount the claimant will receive. Then pay exactly that. If the payment goes out in sterling to a euro account, the claimant's bank converts it at its own rate and the claimant sees a smaller number than the letter promised. That is a complaint waiting to happen, and it is easy to avoid.

The same applies to loss adjusters, surveyors, lawyers and repairers abroad. Paying their invoices in their own currency, in full, avoids short payments and the follow-up emails that come with them.

Should we pay overseas claims by local transfer or by SWIFT?

By local transfer where your provider has one for that currency and country. Use SWIFT where it does not, and set the charges option deliberately.

A local transfer means the provider pays out from its own account in the claimant's country through that country's domestic clearing system, such as SEPA for euros. To the claimant it looks like a domestic payment. A SWIFT payment travels from your provider's bank to the claimant's bank, often through one or more correspondent banks in between, each of which can take a fee.

Provider coverage varies and coverage claims are each provider's own. Ask for the list of countries and currencies where a provider pays by local transfer, with cut-off times, before you rely on it for a claim with a deadline.

Why do overseas claimants receive less than we sent?

Usually for one of three reasons: an intermediary bank took a fee on the way, the receiving bank charged to credit the payment, or the money arrived in a different currency from the account and was converted at the receiving bank's rate.

The first two depend on the charges option chosen when the SWIFT payment is sent. There are three, and they are often misunderstood:

For a claim settled at an agreed figure, OUR is usually the option that delivers that figure. It costs the payer more per payment, so you may choose it for claims and keep SHA for other payments. Where both banks are in the UK, the Payment Services Regulations 2017 require each side to pay its own bank's charges, so the choice of OUR or BEN arises mainly on payments abroad.

The third reason has nothing to do with charges. If you send sterling or US dollars to an account held in euros, the receiving bank converts on arrival at its own rate. The claimant sees fewer euros than the settlement letter stated and the difference does not appear as a fee anywhere. Paying in the account currency stops it.

Can we pay claims in less common currencies?

Often yes, but check coverage, cut-offs and paperwork when the claim is agreed, not on the day it is due. Markups are usually wider and some currencies need extra information or cannot be sent at all.

What matters is whether a provider can pay the specific currency, to the specific country, by the date you need. Points to check:

• Whether the provider can deliver the currency itself, or only send US dollars or euros for the claimant's bank to convert locally. Some currencies are restricted and cannot be bought or sent freely from outside the country.
• Whether the receiving country asks for a payment purpose code or supporting documents, and what the code for an insurance claim is.
• Cut-off times and local holidays. Working weeks and bank holidays differ by country, and a payment sent after the cut-off on the day before a local holiday may wait several days.
• The markup on that currency at your usual payment size, which is often wider than on euros or US dollars.
• How the claimant's bank treats incoming foreign payments, especially where it applies its own conversion or charges.

For a large claim in an unusual currency, ask for a quote well before the settlement date. A blind quote shows how several providers would price and deliver it, including which of them can pay locally.

How do we handle bulk claims payments overseas?

Batch them. Convert once per currency for the whole run and send the payments as one file, rather than buying currency claim by claim.

Bulk runs come from travel and medical claims, warranty and gadget programmes, catastrophe events and third-party administrators paying on behalf of several insurers or syndicates. Converting each small claim separately gives the provider many small trades to price, usually at a wider markup. One conversion per currency for the run is priced as one larger trade, and the individual payments then go out in that currency.

Before the first bulk run:

• Agree the file format with the provider and test it with a few small payments in each currency.
• Put the claim number in each payment reference so receipts can be matched back to the claims system.
• Set approval rules: who builds the file, who approves it and the limits above which a second approver is needed.
• Fund the run in time. Most providers release payments only once cleared funds are in your account with them.
• Decide how returned payments are handled, because some will bounce on closed accounts or wrong details, and who contacts the claimant.
• Check that the provider's confirmations can be loaded back into the claims system without rekeying.

Where claims money is held by a broker, MGA or claims handler on behalf of others, it may be client money, which raises its own questions about where it is held. Our page on client money, CASS 5 and FX sets out the questions for your compliance officer.

How do we check beneficiary details and stop claims payment fraud?

Confirm every new or changed bank detail by phone on a number already on the claim file, never from the email that sent it.

Claims payments are a target because the amounts are known, the payee is expecting money and the details often arrive by email from someone the handler has never met. Fraudsters impersonate claimants, loss adjusters, repairers and lawyers, and a single changed account number in a convincing email can send a settlement to the wrong place.

• Take bank details at the start of the claim through the claims portal or a signed form, not from a later email.
• Treat any change of bank details as suspect until it has been confirmed by phone on a number already held.
• Use a name check where one exists. Confirmation of Payee covers UK accounts. Verification of Payee is a name check that payment providers in the euro area have had to offer on euro credit transfers since 9 October 2025. Ask your provider whether it can run one on your payments.
• Ask why if you are asked to pay an account in a different name from the claimant, adjuster or repairer, and keep the answer and the authority on file.
• Require two people to approve a new payee and any payment above an agreed limit.
• Verify adjusters, repairers and lawyers abroad the same way. Their email accounts are targets too.

InsuranceFX never sends, receives or changes payment details for anyone. If someone claiming to be InsuranceFX asks you to pay money or change bank details, do not act on it and call us on 020 7566 0044.

Who screens an overseas claim payment for sanctions?

The payment provider screens each payment it makes. Your firm keeps its own sanctions obligations for the policy, the claim and everyone paid under it, so the provider's screening does not replace your own checks.

A payment held by the provider's screening is delayed until it is cleared, which matters when a claim must be paid by an agreed date. Allow time for it on payments to countries or people where you would expect questions. For the rules themselves, read the guidance from the Office of Financial Sanctions Implementation and take your own legal advice. InsuranceFX does not give sanctions advice and cannot override a provider's decision to hold or decline a payment.

What should go on the claim file to show an overseas claim was paid?

The provider's payment confirmation with the amount, currency, rate, charges option, value date and payment reference, plus confirmation that the payee received it.

• The amount paid and its currency, the amount converted from, the rate and the time of conversion.
• The charges option used (OUR, SHA or BEN) and any fees charged.
• The value date and the date the payment was released.
• The payment reference quoting the claim number and, for SWIFT payments, the UETR.
• The beneficiary name and account as paid, how those details were verified and who approved the payment.
• Confirmation from the claimant, adjuster or repairer that the money arrived, and in what amount.

The rate and the time let you, or your auditor, check the conversion against the market mid later. They are also the evidence if a claimant says they were paid short, and they show whether the markup on claims conversions has been rising over time. Our guide to FX rate creep explains how to spot that.

What does InsuranceFX do for claims payments?

We find out what you pay now and which providers cover your claim currencies and countries, and put your flow to them without naming your firm. The provider makes every payment.

A cost review of your claims conversions shows the markup you pay by currency and size. A blind quote asks several regulated providers to price the same flow and tell you where they pay locally, their cut-offs and how they handle bulk files. Claims handlers and third-party administrators paying for several insurers or syndicates face the same questions, with reporting back to each client on top. Tell us about that when you ask for a quote.

For the money coming in on the same policies, see converting premiums received in other currencies.

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