This article is by Sara Perez, EVP, EIS
Improving customer experience has been one of the insurance industry’s defining ambitions for more than a decade. Strategies have been built around it and transformation programmes launched in pursuit of it. Yet customers remain dissatisfied.
The latest UK Insurance Service Excellence Index provides another stark reminder of the gap between ambition and reality. Claims emerged as the most negatively perceived aspect of the customer journey, with delays, poor communication and difficult processes continuing to damage sentiment.
The question is no longer whether customer-centricity matters. That argument has been won. The more important question is why, after years of attention and investment, it remains so elusive. The answer is that customer-centricity has too often been treated as an experience-layer initiative when many of the barriers are structural.
Insurers cannot consistently organise around the customer if their data, processes, accountability and technology remain organised around individual policies and products.
Customer-Centricity Cannot Be Built on a Policy-Centric Model
Most insurers are attempting to deliver customer-centric experiences through businesses designed around policies, products and lines of business. Their legacy systems, data, teams, processes and commercial models – many built up over decades and pulled together from disparate systems and solutions – often reflect that structure.
The result is that the insurer sees policies, transactions and tasks, whereas the customer sees one company and is seeking to be treated as one person with a specific, unique, and often changing set of needs.
That structural disconnect explains many familiar frustrations. Customers are often forced to repeat information because outdated systems do not share real-time data and context. Employees struggle to provide answers because data is often siloed within different platforms. Customer communication is driven by internal workflows rather than customer needs. Seemingly simple changes become difficult because they cross product, departmental and technological boundaries.
Claims are where these limitations become impossible to hide. This is the moment when the value of the policy and the credibility of the insurer are tested, often when customers are distressed, financially exposed or dealing with significant disruption. What appears internally as a routine delay, information request or process requirement can feel like indifference to someone waiting to repair their home or recover from a loss.
Customers experience these as service failures, but their origins frequently lie much deeper inside the business. A redesigned portal, new communication channel or customer experience initiative may improve an individual interaction, but it cannot compensate for fragmented data, rigid workflows and an operating model organised around policies rather than people.
That matters commercially. In a market where prices are easily compared and product features readily replicated, the experience surrounding the policy becomes part of the product itself. Insurers that make difficult moments easier can build trust, strengthen retention and compete on something other than price.
But customer-centricity matters far beyond the individual experience. The capabilities required to organise an insurer around its customers are also those required to make the wider business more responsive to risk, opportunity and change.
Address the structural barriers to customer-centricity and insurers begin to fix many of the structural barriers holding back the wider business.
The Insurer Built for the Customer Is Built for a Changing Industry
An insurer that can connect data across products, understand customers in context, change processes quickly and introduce new capabilities without destabilising existing operations can deliver better service. But it can also respond more effectively to almost every other force reshaping the market.
Those forces may be consumer-led, regulatory, economic, environmental or technological. Insurers cannot predict exactly how each will develop, but they can decide whether their businesses are capable of responding.
New distribution models present another commercial test of that adaptability. Ecosystem partnerships, embedded insurance and new routes to market create opportunities across property and casualty, pet and life insurance. Capturing them depends on an insurer’s ability to integrate with partners, configure propositions quickly, exchange data securely and support customer relationships spanning multiple products, channels and providers.
These opportunities can emerge quickly; insurers cannot afford to spend months or years adapting their core systems every time they want to pursue a new route to market.
The same applies to individual tasks, AI can generate useful incremental improvements. But the larger opportunity is to connect intelligence with the data, workflows and operational systems required to act. Without that connection, AI may improve isolated tasks while leaving the overall customer journey fragmented.
As insurers progress from AI-assisted work towards increasingly autonomous, agentic processes, AI will need governed access to the right data, workflows and operational actions Where information and processes remain fragmented, that opportunity will be difficult to realise safely or at scale.
Customer experience, ecosystem expansion and AI adoption are not separate transformation challenges. They depend on the same underlying capability: connecting information, decisions and operations so that the insurer can respond without prohibitive cost, delay or risk.
Yet many insurers remain constrained by technology designed primarily for product administration, stability and long release cycles. Connecting data, changing processes and launching new capabilities becomes expensive, slow and risky, encouraging workarounds that compound complexity.
The result is a business that may understand what customers need, recognise how risks are changing and see new commercial opportunities emerging, but cannot respond quickly or economically enough to act on that knowledge. Better customer experiences are one outcome of greater adaptability; more efficient operations, more effective risk management, safer AI adoption and faster routes to growth are others.
Vision and Culture Need Enabling Technology
The answer is not to treat technology as a cure for every service problem. Customer-centricity must begin with a clear vision of the business the insurer wants to create. That vision must then shape its culture, incentives, organisational structure and operational decisions.
If teams are measured solely according to the performance of individual products or processes, asking them to organise around the overall customer outcome will achieve little. If ownership of the customer remains fragmented, connecting the technology alone will not solve the problem.
But the reverse is equally true. A strong vision and committed culture cannot indefinitely overcome systems that prevent employees from accessing information, adapting processes or acting with a complete understanding of the customer. The sequence is therefore critical: vision first, culture and operations second, then technology capable of turning that ambition into a repeatable reality.
The decline in customer sentiment should not prompt another round of promises about putting customers first. It should provoke a more fundamental examination of what prevents insurers from doing so. Claims may be where the problem is most visible, but it begins long before a claim is made. It resides in how the insurer is organised, how information moves, how decisions are made and how readily the business can change.
Insurers that address those foundations will do more than deliver better service. They will be able to anticipate and reduce emerging risks, harness AI across their operations, enter new ecosystems and bring new propositions to market faster.
Customer-centricity cannot be delivered through promises, portals or isolated experience initiatives. It is the most visible proof that the insurer itself has changed and become connected enough to understand the customer, adaptable enough to respond and intelligent enough to act when it matters.
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