Intro

Insurance isn’t the kind of service people think about every day, until they need it. That’s why building strong, ongoing relationships with customers is so important. When policyholders feel truly understood, they’re more likely to stay, explore new offerings, and recommend their insurer to others.
Engagement is no longer about periodic check-ins or generic emails; it’s about creating meaningful, personalized experiences that build trust. In an industry where long-term loyalty is everything, the companies that master this connection are the ones that stand out and grow. With AI now offering deeper personalization than ever before, insurers have a powerful tool to transform how they engage and retain their customers.

What do customers expect from insurance companies?

An understanding of preferred interaction points

On the highest-level, as McKinsey has found, client expectations vary significantly depending on the type of insurance they buy. Let’s take life and P&C insurance buyers as examples of the two most varying customer segments:

Just by looking at these four expectation types, we can see that not all customer segments will be perfect candidates for full CX automation. Life insurance customers rely heavily on agents for advice, making them the most trusted source of information. Meanwhile, P&C customers are more open to using digital tools for account management, payments, and minor policy adjustments.

Human interaction still matters – more than ever

We live in an era shaped by the Amazon effect. Customers now expect frictionless digital experiences – fast, intuitive, and available 24/7. But insurance isn’t a one-click purchase. Whether it’s life, health, or home coverage, policies are packed with nuance. They involve big decisions, often tied to emotional or high-stakes moments. That’s why human interaction still plays such a vital role.

Unlike e-commerce, where speaking to a person is rare, insurance customers often need that personal connection. In fact, around 80% of insurance-related inquiries still require human support. It’s not because insurers lack digital channels; it’s because policyholders value clarity, empathy, and guidance when navigating complex products.

The challenge? Balancing the expectation for seamless digital service with the reality of human touchpoints. Maintaining call centers and personalized support comes with high costs, but for many insurers, it’s a necessary investment. As customer expectations evolve, finding the right mix of tech and human interaction will be key to building lasting loyalty.

A cohesive customer experience

Because insurance involves relatively few customer touchpoints, each one carries extra weight. That’s why insurtech companies should focus on getting them right – ideally, through a smooth, omnichannel experience.

However, as McKinsey underlines, the customer journey tends to be anything but seamless.

From the outset, the process is fragmented: six in ten customers switch channels before making a purchase. Transitions between online and offline touchpoints are often clunky, or don’t happen at all. Around 17% of potential insurance buyers say they never receive any follow-up from the insurer after an initial conversation – whether that first interaction happened online or over the phone.

Even when there is a follow-up, 40% report having to interact with multiple representatives, resulting in a scattered and inconsistent experience. These gaps highlight a problem, but also an opportunity for insurers who are ready to step up and offer more cohesive, connected interactions across every channel.

What can you do to drive loyalty?

Develop self-serve options for tech-savvy customer segments

Here, we can once again refer to insurance clients who take out P&C policies as an example, as they’re one of the groups who are open to fewer human interactions and open to handling more of the purchase & post-purchase service via digital touchpoints.

For these client segments, insurance companies should prioritize creating easy-to-use digital platforms and mobile apps that allow clients to easily view policy information, make payments, submit claims, and request assistance. By providing intuitive self-service options, customers can handle everyday tasks on their own, whenever it suits them.

Create personalized offers based on in-depth data analysis

With the help of advanced machine learning algorithms, insurers can now process huge volumes of data from IoT devices, social media, and past claims with speed and precision that simply wasn’t possible before. This unlocks the ability to design more personalized insurance offerings that truly reflect individual needs and behaviors.

Much of this personalization stems from the analysis of pseudonymized customer data, which allows insurers to group customers based on what drives their loyalty.

A late-2024 study published in the IJSRCEIT revealed that insurers are now analyzing over 750 million customer interaction points every day through social media analytics alone.

Technology like natural language processing (NLP) plays a major role in interpreting this vast data. NLP algorithms can detect customer sentiment and predict behavior patterns, helping insurers spot risks like potential policy lapses weeks or even months in advance. This gives companies a powerful head start to intervene, offer support, and assist customers before problems arise.

As this illustrates, personalized insurance services go beyond “basic” customization. They are about offering proactive recommendations and real-time support.

By blending predictive insights with seamless digital touchpoints, AI transforms how insurers connect with their customers. They can now build (and sell) not only policies, but relationships rooted in relevance, trust, and convenience.

Expert tip: Consider the types of data you already possess on your customers, and how you can start using it to offer better personalization.

Offer easy access to information

Millennials have grown up in a world of instant answers and digital convenience. They expect to manage everything – from banking to booking trips – with a few taps on their phone. Insurance, however, doesn’t always play by those rules.

Despite craving self-service options, many millennials struggle to fully understand the insurance products they’re buying. These aren’t everyday purchases, they’re complex, jargon-heavy, and often made just once every few years. Whether it’s renter’s insurance or an umbrella policy, the details can be overwhelming.

This disconnect causes frustration. Customers who start online often end up picking up the phone, not out of preference, but because the information they need isn’t easily accessible. For insurers, this is a clear call to action: simplify the language, improve digital navigation, and make core policy details readily available. For example, AI-powered chatbots could guide customers through their policy details in plain language, automatically translating complex terms into simple explanations, while also providing quick access to key information like coverage limits, payment options, and claim statuses.

Meeting customers where they are – digitally – without sacrificing clarity is a critical step toward earning trust and driving long-term loyalty.

Respond to queries fast

In a market where switching providers takes just a few clicks, speed has become more than a nice touch, it’s a baseline expectation. Insurance agencies aren’t only competing with traditional players anymore; they’re up against nimble online platforms and tech-driven neo-insurers. One of the most powerful ways to stand out? Respond quickly.

Fast replies signal that you value your customers’ time and take their concerns seriously. Whether it’s a question about coverage or a claim update, timely communication builds trust, and trust is the foundation of loyalty.

That’s where AI-powered chatbots and virtual assistants shine. With natural language processing and machine learning, they offer real-time help across the insurance journey. From clarifying policy details to assisting with claims. The result? Faster answers, happier customers, and stronger relationships at scale.

Offer loyalty programs

After the pandemic, many insurance companies revisited whether their pre-COVID approach to loyalty programs was still relevant to consumers’ new priorities and expectations.

A study analyzing 28 different loyalty programs across insurance companies shows how different groups respond to various incentives. Customers were segmented into four groups – key customers, prodigal customers, intermittent customers, and unreliable customers. Each with their distinct expectations when it comes to loyalty offerings.

The research for that key customers, those with the highest lifetime value, tend to favor loyalty programs that are long-term and focused on intangible benefits like exclusive access or personalized services. Intermittent customers, who engage inconsistently, care more about tangible rewards that accumulate over time (like discounts and rewards).

Unreliable customers were found to respond better to immediate, short-term incentives that create a sense of instant value. While prodigal customers, who were once engaged but have since drifted away are more drawn to intangible actions, suggesting that emotional connection or brand alignment might help win them back.

Insurers wouldn’t have to design incentives and programs in a siloed manner for each of these groups. Using AI, they could dynamically tailor rewards based on response to existing incentives – or even reassign clients to new segments once they’re effectively re-engaged.

AI is the future of building client relationships in insurance

AI gives insurers a real chance to move beyond generic customer interactions and build genuine loyalty. By learning from customer behavior, preferences, and life stages, AI can help offer more relevant products, timely support, and even personalized rewards – all in a way that feels thoughtful rather than automated.

With AI and data being pulled from multiple sources, personalization is starting to shift toward more sustainable, individualized services — and we believe that’s a big deal. Just look at Netflix or Spotify: they shape their services around the preferences and changing needs of a smaller, focused group of users.

But here’s the thing: not everything should be handed over to machines. For products like life insurance, where conversations can get deeply emotional, many people still want to talk to a human being. They want empathy and trust, not just efficiency. That’s why the future isn’t about replacing people with AI, it’s about using it to enhance the moments that matter, and free up your team to show up where it really counts.

If you’re thinking about building an AI solution that does just that, we’d love to help.

Clurgo can support you as a vertical partner who understands not only how to build engaging products, but also how to navigate the complexities of highly-regulated industries.

Whether you’re looking to validate an AI project idea or need help boosting your operational efficiency or enhancing customer experiences – we’re here to support you.