Personalization, personality and proactivity: 10 insurance customer engagement trends for 2024

If there was a common thread for the insurance sector in 2023, it was “customer experience matters more than ever.”

Insurance industry leaders found themselves at a significant inflection point as customer expectations were heightened and the pressure increased to provide seamless, digital-first experiences for them across every channel. The competition is too tight for carriers to lag behind on customer experience. Doing so means risking policy churn. Meanwhile, the industry at large sought ways to operate more efficiently and increase profitability due to premium increases caused by natural disasters, war and inflation.

For carriers, it all comes down to customer engagement as a means of retaining the clients they have while attracting new insurance consumers. Research from Liberty Mutual shows that agencies with higher rates of digital adoption are achieving greater growth than digital laggards. The question then becomes, which technologies will help insurers achieve these goals? What can insurance organizations do to meet customer engagement challenges as expectations continue to rise?

Carriers who successfully navigated the turbulence of 2023 are now looking ahead to what’s next. Here are ten customer engagement predictions for the new year:

1. AI, but empathetic: As EY notes, “Generative AI (GenAI) promises to revolutionize risk assessment, claims processing, marketing, sales and service and other essential aspects of the business.” In 2024, artificial intelligence isn't only smart; when applied properly, it can have heart. Currently, AI-based language modeling is already in development that will be smart enough to mimic human empathy and emotional reactions to improve customer interactions. Expect AI that doesn’t only process claims, but also understands your customers’ frustrations about their dented car.
2. Mobile-first (and only) interactions: Having a website with a customer portal is no longer enough. And mobile as an engagement channel is no longer just an option; it’s the No. 1 tool for most users. Users demand the ability to file claims, adjust policies and get advice – all from a smartphone. Our recent research on insurance customer behaviors shows that 85% of insurance customer portal access came from mobile devices.
3. Hyper-customized policies: Hyper-personalization enables carriers to provide personalized, contextualized interactions across sales, marketing, underwriting, servicing and claims. Insurance policies will start to become as unique as fingerprints. Customers will be able to get coverage and micro-policies based on their unique lifestyle needs. For insurance carriers, this will require a modern front-end experience that can handle complex policies and all their variations.
4. Self-service everything: Why talk to humans when you can click a few buttons? As self-service technology matures, a greater number of consumers prefer self-service options such as automated voice response to contacting a live support agent. Zendesk reports that a whopping 91% say they would use a knowledge base if it met their needs. This trend is growing in insurance, as more customers want this option. In fact, our research shows that self-service omnichannel options can boost retained premiums by 21%. In 2024, self-service portals will become the norm, making insurance as easy as online shopping.
5. Predictive analytics for proactive protection: Predictive analytics technology has the capability to collect data from an array of sources. The goal is to gain a more accurate understanding of customer behavior and predict the future needs of insureds. In 2024, insurance companies will have the ability to forecast what might go wrong before it actually does, avoiding risk instead of just assessing it.
6. Wellness integration: Insurance companies will double as fitness coaches. Expect nudges from your insurer to hit those 10,000 steps a day – or risk premium increases. Our research shows a 25% increase in retention among those who use outbound SMS messages to engage with insureds.
7. Eco-friendly insurance products: As PWC notes, “The insurance industry in particular has shown significant interest in sustainability. This is a result of the impact that climate change, amongst other socio-economic issues, will have on the insurance industry, especially with regard to underwriting and profitability. Due to this interest, it is no surprise that the need to write green/sustainable insurance products is on the rise.” What will this mean in 2024? Expect more insurance products that will cater to the eco-conscious crowd, offering discounts for sustainable choices.
8. Real-time risk assessment: Wearables and IoT devices have already impacted the insurance industry, especially auto and life insurance products and underwriting. As this technology matures, clients will be able to feed data directly to insurers for real-time risk assessment. In other words, a client’s smartwatch now has the power to become an underwriter.
9. Insurance shopping platforms: Insurance policy comparison websites forced the insurance industry into the 21st century. For the first time, policy pricing models were out in the open, and consumers had the power to compare and contrast policies in real time. In 2024, comparison shopping for insurance will get a real style upgrade, simplifying and improving the insurance buying experience.
10. Insurance influencers: Like it or not, insurance will be a topic on TikTok and Instagram – with less dancing, we hope! Expect to see Generation Z influencers having more to say about insurance as they reach adult milestones such as home ownership and parenthood.

Omnichannel insurance strategy will be more crucial

As insurers continue their transition to digital, it will be more essential than ever to deliver a consistent, personalized omnichannel engagement strategy. Carriers can achieve more meaningful interactions with policyholders through targeted, proactive communication that helps customers solve problems. Sending helpful text messages, for example, goes a long way toward building trust and increasing retention.

The insurance industry in 2024 is shaping up to be a blend of high tech, high touch and high customization. It's not only about coverage; it's about an experience tailored to you. Happy New Year and best of luck to all.

Steve Johnson is the co-founder and head of product for insured.io. Contact him at [email protected].

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