In insurance, trust is everything. But as insurers double down on digital, they’re unintentionally pulling away from what customers value most—empathy, clarity, and human connection.

Over the last few years, insurers have gone all-in on digital self-service. They’ve launched mobile apps, AI-powered chatbots, and customer portals. These tools handle basic transactions just fine. But during a crisis, a claim, or a tough conversation, they often fall short.

That’s what creates the Customer Experience (CX) gap in insurance—a growing disconnect between what insurers think they’re delivering and what customers actually experience.

The Illusion of Progress: Digital, But Disconnected

Let’s talk numbers. Around 90% of insurance executives believe their companies have earned customer trust. In reality, only 30% of customers agree. That 60-point gap isn’t just disappointing, it’s dangerous.

Customer satisfaction in insurance dropped globally between 2023 and 2024, even as companies invested heavily in CX initiatives. Why? Because the tools aren’t the issue, it’s how they’re used. Many digital experiences feel efficient but cold. They’re fast but impersonal. Available, yes—but rarely helpful when things get complicated.

The real problem? Insurers keep designing for transactions when they should be designing for trust.

What Customers Really Want: Speed, Empathy, Transparency

Today’s insurance customers don’t just want policies; they want peace of mind. And that comes down to three key things:

• Speed, especially when they’re filing claims or fixing issues. Life insurance customers rank speed as the top trust factor now.
• Empathy, particularly when they’re stressed, scared, or vulnerable. But empathy scores among insurers have dropped sharply.
• Transparency, in policy wording, pricing, claims processes, and even how AI makes decisions.

Big tech companies have raised the bar for customer experience. Insurance customers bring those same expectations with them—and they won’t settle for less.

Self-Service: Great for Simplicity, Weak for Complexity

Self-service absolutely has its place. Customers love the convenience of checking policies, making payments, or submitting basic claims without calling in. Insurers save money and improve efficiency. It’s a win-win for simple tasks.

But when things get emotional or complicated, like a serious accident or a denied claim, self-service often falls flat.

AI chatbots can handle frequently asked questions, but they don’t do nuance. They don’t comfort a grieving family. They don’t explain why a claim got rejected in human terms. And when customers feel like no one’s listening? They don’t always complain. They just leave.

Here’s a harsh stat: for every 26 unhappy customers, only one gives feedback. The other 25 walk away quietly. That’s silent churn, and it’s one of the biggest hidden risks in CX.

The Consequences: Churn, Distrust, and Diminished Value

A poor customer experience doesn’t just hurt your reputation—it hits your bottom line.

• 65% of customers switch brands after a bad experience.
• People talk. 13% of unhappy customers tell at least 15 other people.
• In mature markets, life insurance penetration dropped from 4% in 2007 to just 3.6% in 2023.

When insurers miss the mark on CX, they pay more to acquire new customers, lose existing ones faster, and struggle to stand out in a crowded market. It’s a lose-lose cycle.

So, What’s the Fix? A Human-Centric Digital Future

Insurers shouldn’t ditch digital—but they must redesign it. The future of CX in insurance blends smart technology with human sensitivity.

Hybrid Service Models

Let your digital tools handle routine tasks. But when a situation gets serious, make it easy for customers to switch to a real human, who already has their data, understands the context, and can act. A seamless, connected experience across channels is the new standard.

AI That Augments, Not Replaces

Use AI to support, not substitute, human agents. Let it summarize documents, triage requests, and route queries smartly. But put real people in charge when emotions run high or decisions get tricky. Arm those people with AI insights so they can act faster and smarter.

Hyper-Personalization at Scale

Move beyond one-size-fits-all offers. Tap into behavior patterns and predictive analytics to tailor communications, recommend products, and prevent problems before they start. When customers feel understood, they’re more likely to stay loyal.

Empathetic AI Design

Upgrade your chatbots. Train them to recognize frustration, confusion, or distress. Build in logic to shift tone, suggest human escalation, or adjust responses based on sentiment. Emotional intelligence isn’t just for humans anymore.

Radical Transparency

Explain everything. Make policy terms simple. Break down pricing. Walk customers through the claim process clearly. And if AI plays a role, show how it reached a decision. People don’t need perfection—they need honesty.

Empowered Employees = Better CX

Happy, supported employees give better service. Train your frontline teams to handle tough conversations. Give them the tools, data, and authority to solve problems. The better their experience, the better your customers’ experience will be.

Final Thoughts

CX isn’t just nice to have; it’s your brand, your competitive edge, and your biggest lever for growth. Products look alike. Pricing is tight. What sets you apart is how you make people feel.

Self-service gets you part of the way there. But to close the CX gap, you need more than portals and chatbots. You need human-centered design, emotionally intelligent tools, and a commitment to helping customers feel heard and supported, especially when it matters most. Because in insurance, customers don’t just want convenience. They want confidence, and that only comes from trust.