The insurance industry suffers from a big problem that has always been very difficult to overcome. Typically, there are only ever two customer engagement moments with an insurance company.
Buying a policy: A necessary (but transactional) purchase. Often, this may be mandatory, such as building insurance to protect a property mortgage or auto insurance to protect against collisions. It may also be selected using a comparison engine rather than directly selecting a specific insurance brand (e.g., the customer is shopping for the cheapest option, not a specific brand).
Filing a claim: These calls often occur during stressful situations. Nobody wants to have to file a claim, but if you have experienced a house fire or a car crash then you will be doing this with many other concerns on your mind.
Neither of these experiences is exactly positive for the customer. The insurance company is either taking your money or you’ve found yourself in a stressful situation where you need their help.
So, how do insurance companies move from this situation — where they are just seen as a necessary expense — into becoming a valued service?
To achieve this, insurers must integrate their service into the everyday life of their customer, so they can provide ongoing value that aligns with their lifestyle, health, and financial well-being.
But, how does a necessary purchase become a lifestyle accessory? Let’s consider a few areas where insurance companies can change the customer experience of insurance itself and become more than just a mandatory purchase.
Move from transactions to engagement Stop thinking of customer engagement as an annual activity that just focuses on policy renewal. Think how to build a group of customers that find it useful to be a part of your network. How can you offer additional proactive services that make you stand out?
Offer lifestyle tips and guidance. For example, better and safer driving tips for auto customers. Use AI analytics to analyze when and how customer lifestyles might be changing so you can proactively offer them policy updates — for example, life changes such as marriage or having children.
Offer preventative services that help to prevent claims (e.g., wellness checks for health insurance customers). It may seem like an additional expense for the insurer, but preventing big claims further down the line is a win for the insurer and the customer. Some insurance companies have even explored the concept of wellness-as-a-service.
Reward engagement with incentives and gamification Customers only ever see the cost of insurance. They rarely see it for the protection to their lifestyle that it really offers. Insurance companies can create engagement plans and gamification that reinforce its benefits.
Engagement with wellness can use gamification — such as leaderboards and streaks. Safe driving or installing home security or other positive and risk-reducing behaviors can be directly rewarded with perks or cashback. You can even consider how to create tiered perks for the most engaged customers.
State Farm offers auto insurance discounts of up to 30% if the customer is willing to allow the app to monitor their driving. It’s an exchange that works both ways because a safer driver is less likely to need to claim from the insurance company. This kind of discount and engagement helps to bring the customer and insurance company together, rather than just being invisible until a claim is needed.
Be where the customer is Integrate your services into the lifestyle of your customer — just like the previous State Farm example using a phone app. Home insurance brands can work with fire alarms, leak detection devices, and home security systems. Work with all these manufacturers to become a part of the device ecosystem.
Offer rewards to health insurance customers if their Apple Watch or Fitbit is recording higher-than-average activity. Offer connectivity to financial planning software so insurance details can be listed alongside other financial plans so it is seen as valuable.
There are many different examples of insurance companies that reward their customers this way. John Hancock insurance has noticed that Apple Watch users are around seven times more engaged with their insurance wellness plan than other customers, so they offer reduced price watches to their customers.
Build a stronger emotional connection with customers This is not easy. Customers usually only think of insurance when something goes wrong in their life. This is why brands that can build an emotional connection can really change how insurance is seen by that customer — it can become a positive part of their life.
This can also be achieved through storytelling. Engage with customers and describe real customer stories to them — show the value of insurance in real-life examples.
Offer help to customers who are experiencing major changes in their life. If a customer is about to buy a new home or have their first child, offer them free advice on insurance changes that might be appropriate. Provide more general support to the well-being of your customers, even when it may seem to be in parallel to the main business.
When McKinsey surveyed 8,500 North American insurance customers , it was clear that the customer experience with the brand was a key indicator of the financial performance of each company. That is a powerful correlation.
Personalize the experience with AI and predictive analytics The traditional idea of proactive engagement in insurance was sending a bill for the next year of cover — often surprising the customer with the increase on last year.
Change this approach by creating many small engagements — or micro-moments — throughout the year by creating personalized interactions that can be helpful or acted on by the customer.
Customers may need policy adjustments without even realizing it and risk may change — a significant birthday for example. Aviva makes it clear that they use data on customer behavior to enable ongoing contact — usually to offer deals or reminders to the customer . This is entirely personal though, and based on the behavior of each individual.
Make the claims process a positive experience It’s almost an oxymoron for many, but there is no need for the claims process to be negative — when a customer is facing a crisis, they want the claims process to be hassle-free, fast, and friendly. They need support.
If you can offer all this and personalize your service, then customers will notice — even in their moment of crisis.
It is becoming more possible to automate simple claims in which there is little to no complexity. Make it automatic. Pay the claim immediately. When a claim is more complex, allow tracking on your app, just like tracking the progress of a parcel.
Offer additional services that go beyond what is needed when it is clear that your customer desperately needs help — such as arranging emergency housing if a customer has just watched their home burn down. It might be more than is detailed in the policy, but that customer will never forget.
Allianz has created a universal claims portal that either makes an instant decision on a claim or allows real-time progress tracking — so customers feel supported through the entire process.
Building customer relationships Ideally, insurance brands need to move on from the idea that they are just a necessary expense to becoming a valued lifestyle partner.
To do this effectively, insurance companies must move beyond a focus on selling policies to being a trusted partner of every customer. By rewarding proactive behavior and using AI for personalization, insurers can turn customer interactions into positive experiences — ensuring they are seen as essential, engaging, and valued year-round.
Insurance is not just about risk and protection; it should be focused on proactive partnership.
Partner with VXI for proactive customer engagement Building stronger customer relationships in the insurance industry requires more than just transactional interactions. By embracing proactive engagement, personalization, and value-driven experiences, insurers can transform how customers perceive their services.
VXI is uniquely positioned to support insurance brands in achieving this transformation. Our tailored customer experience solutions offer the flexibility and scale needed to engage policyholders effectively — from wellness incentives and claims management to predictive analytics and omnichannel support. Our dedicated teams ensure that every customer interaction fosters trust and loyalty.
Whether it’s optimizing claims processes, providing multilingual support, or using AI to anticipate customer needs, VXI helps insurers turn every touchpoint into an opportunity to strengthen relationships. Let’s redefine what it means to be an insurance partner — together.
Contact us today to discover how we can help you build more meaningful customer connections.
