Generative AI. IoT. Machine learning. Digital twins. The metaverse – are we solving real problems or falling in love with tech hype? Every so often, a shiny new tool promises to revolutionize entire industries – and insurance is no exception. As the enthusiasm grows, so does the pressure to adopt the latest and best technologies.
I’ve heard so many insurers talk about the power of GenAI and the budgets they spend on implementing a fancy tool. However, I have yet to see a case that really improves the customer experience.
The question is: Are we really solving the problems that matter most to our customers, or are we just decorating the ivory tower with more buzzwords? To be clear: I’m obsessed with new technologies. I’m as curious as a kid in a candy store. GenAI is forever my best friend, and blockchain fascinates me just as much as VR technologies for treating mental illness.
But I’ve learned to rein myself in and focus more on the problem and the customer than on my endless curiosity for cool stuff. Ultimately, we’re here to solve a customer’s problem, not to impress them with our technical skills.
Buying insurance: simplify everything and meet customers where they are
People are busy. Life is complicated enough. Insurance shouldn’t add to the stress. Buying the right insurance should be as easy as buying a cup of coffee. If you have more complex needs, you should be advised by a real “barista”. I’ve spent years developing insurance products, but sometimes I get lost in the terms and conditions.
What about the average customer? No wonder they’re hesitant to engage or feel frustrated by the experience. Speak plainly, eliminate unnecessary steps and design digital platforms that meet customers where they are – not where we think they should be.
Be obsessed with the problem, not the solution
A few years ago, we had a project to optimize home insurance. We conducted qualitative research in several Western and Eastern European countries and asked customers about their main concerns regarding their home. Naturally, we expected them to say that they wondered what insurance cover they could get before going to bed.
None of them mentioned insurance. What a disappointment! However, something else emerged from these interviews: people in large cities were worried about finding trustworthy tradesmen in the event of damage.
This gave us an idea: what if we created an easy way to access a handyman platform with reviews and a quality guarantee? What about creating an offer based on this problem, with insurance as one of the benefits?
Understand the customer’s concerns, lifestyle, preferred channels and actual needs, rather than pushing them to buy a product. Insurance will never be sold as a “hype product” – because it’s not.
The eternal fascination of the insurance customer portal
Every Sunday morning I wake up full of anticipation. Why? Because it’s time to dive into my insurer’s exciting newsletter and explore the wonders of their state-of-the-art portal. And the app – oh, the insurance app! It’s so captivating that I can hardly put it down!
Of course I’m only joking. I’ve never heard of customers being “thrilled” by our newsletters. Portals and apps are only used when they offer real added value or are the only way to report a claim (spoiler alert: this is bad practice).
Instead of investing in technology that drives consumers crazy when they forget their credentials, focus on the essentials.
Let me tell you a story: I once had the great idea of creating WhatsApp and Facebook Messenger chatbots that customers could use to submit damage reports. We tried to capture reports as soon as possible after the accident.
We almost flew to Facebook’s headquarters to discuss an intergalactic partnership. We were excited and full of energy – what a revolution! A few days later, we organized a customer test and asked them which apps they use the most. No surprise – WhatsApp and Facebook Messenger.
I shared our brilliant idea and prepared myself to hear applause from grateful customers. In my mind, I prepared an Oscar-winning speech: “Thank you, team! Thank you, mother! Thank you, God, for the inspiration!”. They exchanged puzzled looks, and then one broke the silence: “No! I wouldn’t use these apps to communicate with an insurer!”
In my mind I thought: They don’t understand innovation. Maybe they didn’t. After all, Henry Ford didn’t build faster horses. And yet we missed our chance to create the Western “WeChat”. It was indeed a humbling lesson.
Damage reports: The ultimate test of customer experience
Let’s talk about damage reports. This is the moment of truth for every customer. At this point, the insurance company’s promise is either fulfilled or broken. It’s not just about processing claims faster. It’s about solving the customer’s problem seamlessly and quickly and getting them back on track.
One example: We once investigated motor claims in Western European markets. We found that cash settlements resulted in an NPS score 10 points lower than repairing the vehicle, even if the payment was made quickly.
Why? Because the customer didn’t just want money – he wanted his car to be repaired quickly. We focused on speed, but forgot the most important element: convenience for the customer.
Of course, there are cases where a quick payment is just the thing, such as travel delays or parametric insurance. By the way, we often destroy the magic of parametric insurance by using an old-fashioned bank transfer that takes two days to process. There are ways to pay immediately.
Speaking of convenience, I’ve seen companies invest in sophisticated tools like video-based damage estimates for motor claims. They have failed.
Customers were told to take their car outside in perfect light, dance around it, have a great camera and show all the scratches and dents. They were somehow not very enthusiastic. “What if I make a mistake? The insurance company might think I’m trying to commit fraud or pay me less than I need to fix my car,” they said.
Customers care little about your advanced, unique, proprietary, intergalactic and world-dominating AI/ML, VR/AR technology. Solve their problem and show some empathy during the process. It’s as simple as that.
Sales: direct sales and intermediaries
The insurance industry has long complained about its dependence on intermediaries. But let’s be honest: as long as customers are overwhelmed by the complexity of insurance, they will turn to someone they trust to advise them. There are two ways forward: direct access to simple products and the development of suitable intermediary tools.
Would you like to sell more directly?
Create digital products that are easy to understand and really solve customer problems. Stop selling products. Start selling solutions. For example, if your customer’s problem is to secure their family’s future, show how your product solves that problem.
I’m amazed at how little insurers use social media. Yes, insurance is not the most attractive product to advertise on Instagram. But how about real customer stories? Be creative, monitor social media trends and find the right starting point.
Empower intermediaries with better tools.
Instead of trying to replace agents, help them excel. Develop tools that make selling faster and smarter, such as automated lead generation, planning tools and social media marketing platforms. Bundle these into service centers of such quality that it’s a breeze for agents to use them.
Focus on the added value for your sales staff, not just on cost reductions. Don’t underestimate the power of human relationships. For a customer making a lifetime commitment, the security of a trusted human advisor can be irreplaceable.
Prevention: the future of insurance is proactive
The best insurance is the one you never have to use.
Prevention is not just a buzzword – it is the key to reducing claims, improving customer satisfaction and ultimately building trust. Thanks to technological advances, insurers today have unprecedented opportunities to avoid risks before they occur.
For example, IoT devices can monitor water pressure in pipes to detect anomalies and prevent costly burst pipes. Wearables and lifestyle advice can help customers lead healthier lives, reducing the number of claims for critical illnesses. Continuous monitoring and detailed data from battery energy storage systems (BESS) can detect potential malfunctions and prevent catastrophic failures before they occur.
These proactive solutions protect what is important to our customers and can save the insurer money. The role of the insurer is changing from safety net to advisor in the lives of its customers.
Building trust: The industry’s biggest challenge
Insurance companies have a trust problemand let’s be honest – they deserve it.
Customers still associate insurance with hidden small print, denied claims and impersonal service. Trust is not created by flashy technology, but by actions that count. Mystery may suit Sherlock Holmes, but insurance should be crystal clear – in terms, conditions and especially the claims process. Customers need to know what to do, who to call or which button to press.
Train your claims staff to show empathy. Yes, they see accidents every day, but for the customer this is probably a one-off event. Insurance is there to protect people when they are at their most vulnerable.
Technology can streamline processes, but it will never replace humanity. And above all: keep your promises. Do what you said you would do. Every time.
From hype to impact
At its core, insurance is not about technology, but about to protect people to protect people. To support them. To help them get back on their feet when life doesn’t go as planned.
The tools we use should strengthen these relationships, not detract from them. So the next time we’re debating whether to invest in the latest trend, let’s ask ourselves the tough questions: Does this simplify our customers’ lives? Does it help to avoid risk? Does it make insurance more accessible, understandable or human? Does it build trust?
If the answer is “no”, perhaps it’s time to focus on the essentials – namely the real problems that our industry was created to solve.
Mirela Dimofte
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