Embracing human-centred transformation in insurance can bolster customer loyalty in a competitive landscape

Authors-
Caroline Giroux-Huppe, Manager, Customer & Growth, Marketing, Sales and Service, EY Design Studio
Jimmy-James Bergeron, Leader, Customer Transformation, Financial Services
Amanda Fiore, Senior Consultant, Customer Strategy & Innovation 
Contributor:
Jennifer Baziuk, EY Canada Insurance Consulting and Customer & Growth Leader

Unlock customer loyalty in insurance through human-centred transformation and innovative experiences in a competitive market.

In brief

• In insurance, providing value extends beyond transactions; it involves fostering meaningful experiences that build trust across the stakeholder ecosystem and maintain the industry’s integrity.
• True transformation occurs when we bridge the gap between front-stage customer interactions and back-stage operations to create a well-integrated experience for all stakeholders.
• Understanding the root causes of insurance pain points is about more than fixing problems; it unlocks opportunities for innovation and growth.

As digital transformation reshapes diverse industries, traditional insurers face the need to quickly reinvent themselves to compete sustainably against agile insurtech players and online disruptors who are rapidly increasing customer expectations. But without meaningful human-centred experiences designed to secure customer loyalty, why should customers remain loyal amid fierce price pressure and innovative experiences from competitors? 

Brands with superior customer experiences generate 5.7 times more revenue than their less successful competitors, highlighting the critical importance of prioritizing customer experience. To unlock long-term value, insurers must align their people, processes and technology to deliver an exemplary experience for customers — whether they are policyholders or strategic distribution partners like brokers — while complying with regulations and building a meaningful employee experience.

Building trust and customer relationships

The insurance industry is built on selling intangible, risk-based assets that customers rely on during times of distress such as property damage, injury, or theft. In this context, customer trust in the suitability and fairness of products and the integrity of the industry is of paramount importance. 

Customers expect value beyond the transaction — they seek not only coverage for risks but also a strong relationship with their insurer, characterized by exceptional service, stress-free claims support and informed protection throughout the lifecycle of their insurance journey. To achieve this, a human-centred approach to digital transformation is essential, prioritizing customers’ needs and experiences at every touchpoint.

True transformation occurs when insurers bridge the gap between customer experience expectations and internal operations, creating a robust experience for all stakeholders. By conducting root-cause analysis of pain points, insurers can effectively link front-stage experiences with back-stage processes, enhancing service delivery and customer satisfaction. 

This analysis not only uncovers underlying issues but also paves the way for innovation and sustainable growth that aligns with customer needs. Additionally, engaging external stakeholders such as agents, brokers and regulators is essential for consistent messaging, which builds customer trust and fosters collaboration.

A broad-based approach to human-centred transformation

We understand that a broad-based, human-centred approach to customer transformation is essential for achieving long-term success in the insurance industry. By aligning the current- and target-state visions of customer experience with those of back-stage operations, we help the overall transformation address both critical human and business needs. This alignment delivers valuable insights that inform business strategies, prioritize new and existing strategic initiatives, and enhance insurers’ overall return on investment.

The human-centred digital transformation approach is designed to foster cross-functional collaboration among departments, strengthening internal alignment and enhancing shared expertise. This collaboration creates opportunities for innovation across various functions, including process, technology, finance, data, HR, legal and compliance.

By using service design principles and service blueprint tools as a single source of truth, insurers can effectively break down silos and guide transformation efforts, leading to meaningful change throughout the organizaton that advances everyone collectively.

Case study

EY worked with a major insurer to implement a strategic, human-centred digital transformation that integrated front-stage experiences with back-stage operations. We identified 231 pain points from various stakeholders and developed 16 initiatives to reduce the pain points to 51 within a five-year roadmap, representing an alleviation of 78%.

Additionally, a new customer segmentation approach enabled the client to understand how the initiatives would impact different customer profiles. Through co-creation workshops, market research, leading practices and documentation of each initiative’s realized value, we not only helped the organization effectively implement the transformation, but also made it align with their specific customer needs.

The shift in perspective

Adopting a strategic human-centred approach to the transformation journey enables insurers to deliver tailored experiences across the stakeholder ecosystem that resonate with customers and foster trust. This shift in perspective — from a narrow focus on technical details and systems to a prioritization of human-centred insights — encourages insurers to empathize with their customers and adapt their business models to foster stronger, lasting relationships. It also requires alignment with evolving customer expectations and needs.

A strategic experience-led transformation must be designed to continuously adapt and innovate to remain relevant, avoiding a one-and-done solution that is outdated from the moment it is implemented.

Why human-centred digital transformation is essential for the insurance sector

Customer benefits

• Fosters meaningful connections: Human-centred digital transformation strengthens relationships with customers and partners by putting emphasis on understanding their needs and addressing their issues, creating a more engaged stakeholder ecosystem.
• Enhances customer loyalty: By prioritizing and better understanding customer needs and preferences, insurers can build trust and loyalty, leading to long-term retention.
• Improves customer experiences: Emphasizing human-centred insights allows insurers to tailor their offerings, enhancing satisfaction and overall experiences.
• Maintains market relevance: Adopting a human-centred approach helps insurers stay relevant in an evolving market, adapting to changing customer expectations.
• Encourages innovation: By understanding customer pain points and needs, insurers can innovate their products and services to better meet market demands.

Business benefits

• Drives sustainable growth: A focus on customer-centric strategies enables insurers to identify new opportunities for growth in a competitive landscape.
• Strengthens internal alignment: A human-centred approach promotes collaboration across departments, aligning all teams in providing exceptional customer experiences.
• Facilitates data-driven decisions: Customer insights enable insurers to make informed decisions that enhance operational efficiency and effectiveness.
• Optimizes business performance and ROI: By aligning strategies and initiatives with customer insights and operational efficiencies, insurers can improve overall business performance and boost ROI.

What’s the bottom line?

Anyone can undergo a transformation, but to truly succeed you must align with your customers’ diverse expectations now and in the future — or risk losing relevance.

Key takeaways include:

• Customer-centric focus: Insurers must prioritize understanding and addressing their customers’ diverse needs and expectations. This focus fosters trust and loyalty, which are crucial in a competitive market.
• Integrated experiences: It’s vital to bridge the gap between customer interactions and internal operations. A well-integrated experience enhances satisfaction and strengthens relationships with policyholders and partners alike.
• Innovation and growth: By identifying and addressing pain points, insurers can unlock opportunities for innovation, leading to sustainable growth and improved market relevance.
• Long-term value: A strategic transformation with humans at the centre not only enhances customer experiences but also drives operational efficiencies, ultimately boosting ROI.

To encourage insurers to adopt a human-centred approach, it is essential to recognize that this shift is not just beneficial but necessary for long-term success. By aligning their strategies with customer insights and fostering a culture of empathy and innovation, insurers can create meaningful experiences that resonate with their stakeholders.

The long-term benefits — enhanced customer loyalty, increased revenue and a stronger competitive position — are well worth the investment. Now is the time to act and lead the way in redefining the insurance experience for the future.