This piece is by Eileen Potter, VP, Insurance, Smart Communications
Across the UK, something counterintuitive is happening in insurance. Customers, long assumed to be sceptical of artificial intelligence, have quietly started to embrace it. The prevailing assumption has been that concerns around ethics, mistrust of automation, or fear of the unknown would keep policyholders wary of AI-led processes. The reality is different. New research shows those fears are fading. Consumers aren’t resisting AI. In many cases, they’re actively expecting insurers to use it. The reason? Customers are beginning to see ways that it can make their insurance experience better.
Consumers have moved on, insurers haven’t
For years, insurers believed customers weren’t ready, yet the data now contradicts that view. According to research, 51% of insurance customers say AI would be valuable in helping them make personalised plan changes. A number that rises dramatically among younger demographics: 62% of Millennials and 58% of Gen Z are already comfortable with AI supporting major financial decisions.
And it’s not simply openness. It’s appetite. Nearly two-thirds of customers believe AI will improve the insurance experience within the next five years, while only a small minority thinks it will make things worse.
Consumers have become accustomed to AI in retail, entertainment and transport. Insurance is now one of the few areas where digital intelligence isn’t yet visibly embedded in everyday interactions, and customers are starting to notice that absence.
So, where should insurers focus their AI usage? Below are four places they can start:
Data intake is where the customer experience breaks down
If there is a single moment where customer enthusiasm for AI collides with insurer inertia, it’s during data collection. Claims, onboarding, quotes, policy changes –all hinge on forms. And for many customers, forms remain insurance’s weakest digital moment.
Forty-one percent of customers say insurance form-filling is time-consuming, and 65% say they will abandon an interaction entirely if the data collection experience is too difficult. Millennials and Gen Z, who make up the industry’s future customer base, are even more likely to walk away.
When younger consumers abandon forms at these rates, insurers are losing relationships before they’ve even begun.
The problem is not the information being asked for. It’s the outdated way insurers still ask for it. Static PDFs, repetitive fields, document uploads and processes that don’t remember previously shared data have become the digital equivalent of endless paper forms. Guided digital journeys are now the baseline expectation. Sixty-four percent of customers say they prefer guided digital forms over PDFs, and 77% say digital data collection is important.
Silence after submission is eroding trust
Once a customer submits information, they expect clarity on what happens next. In insurance, that expectation is routinely unmet. Post-submission silence remains one of the most persistent sources of frustration.
Almost half of all UK customers say they want insurers to clearly communicate the status of their request after submitting a form. Instead, they often get nothing. Days pass, and emails are sent asking for details that have already been provided.
Customers call to chase updates and wait on hold for information that should have been automated. In other industries, real-time tracking and AI-assisted status updates are standard. But insurance has been slow to adopt even basic equivalents.
Omnichannel inconsistency is dragging the industry down
Beyond forms, customers are struggling with communication that doesn’t line up across channels. Only half of insurers communicate through their preferred channel, and the rest think the quality of communications falls short of expectations.
This fragmented experience matters. Consistency across channels is important for trust, and insurers who fail to deliver it create confusion and friction.
When each interaction feels disconnected, it reinforces the sense that the insurer is operating on outdated systems, which, in many cases, is exactly what’s happening.
Loyalty is slipping, and AI can help stop the slide
The consequences for insurers who fail to modernise are worsening, with 67% of customers claiming they would switch providers if communications do not meet expectations, a figure that has increased year-on-year.
Challenger brands and digital-first insurers have built their growth not only on products but also on experiences that feel intuitive and human-centered. Meanwhile, traditional insurers often rely on processes that feel inconsistent or inefficient.
Customers don’t necessarily want to leave their insurer, but they will if they feel they must.
The industry needs to redesign
The good news is that insurers don’t need to tear down legacy systems overnight. They need to redesign the experiences customers see and feel.
That means reshaping data intake into guided, conversational digital journeys; making communications automatic and transparent; creating omnichannel experiences where customers move between channels seamlessly; and using AI in ways that are visible, well governed and clearly in service of the customer.
These aren’t technical moonshots, but achievable shifts that directly respond to what customers are already telling the industry. The only question now is how quickly insurers can close the gap, because customers aren’t waiting anymore.
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