5 minute read 20 Sep 2022
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Nine customer types defining the next wave of insurance

By Chris Raimondo

EY Americas Insurance Technology Leader

Passionate about building a better working world. Helping insurers modernize and solve complex business challenges through technology and innovation.

5 minute read 20 Sep 2022

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Shifting consumer needs are an invitation for insurers to innovate in pursuit of growth and to stay ahead of new competitive threats.

In brief
  • Demand for hyper-personalized and real-time risk protection requires broad adoption of artificial intelligence (AI), machine learning and digital platforms.
  • The industry continues to adjust to new climate risks, reinforcing the importance of ESG-led strategies and proactive risk management.
  • Focusing on distinct personal and small commercial customer types will unlock growth and innovation opportunities.

The next decade will see a fundamental reorientation of the insurance business. The traditional focus on products, policies and paying claims will shift to services, experiences and creating value. Put another way, what customers want and need, not what insurers want to sell or have always sold, will be the dominant driver of innovation and growth.

How insurers engage customers and the channels they use for distribution and service will change just as dramatically. In many cases, the “face” or “front door” of insurance will be distribution partners, including banks, manufacturers, health care providers and other high-profile brands outside the industry.

Today, more insurance leaders are recognizing how customer insights drive improvements in products, services and experiences. In that sense, changing consumer needs and expectations are both an invitation for insurers to innovate and a blueprint for their transformation programs.

To satisfy those rising consumer demands, engage with new customers and retain existing ones, insurers will have to overcome their reputation for delivering subpar experiences and emphasizing standardized policies and traditional channels over customer needs and preferences.

Our latest report, NextWave Insurance: Consumers & Small Businesses (pdf), focuses on nine key customer types that will define the market on the road to 2030. These customer categories frame both the formidable challenges and unique opportunities insurers face in a highly dynamic market. Of course, not every insurer will focus on all nine of these groups. But there are common themes across them, including the need for tailored coverage, personalized service and richer digital experiences – all of which add up to increased value. The nine groups are:


  • 1. Point-of-sale purchasers

    This group values the peace of mind that comes from knowing that the items they buy – consumer goods, jewelry, travel or concert tickets – are protected from the moment they’re purchased. Embedded finance and a growing market for point-of-sale insurance mean insurers can reach more customers, demonstrate the value of insurance and increase their relevance.

  • 2. Virtual vanguards

    With more people spending more time in the metaverse, there is rising demand for protections that cover digital assets (e.g., crypto keys, virtual identities and brands). Insurers can connect “metazens” by offering bulletproof identity protection that prevents hacks, breaches and theft; business interruption coverage for virtual events; and fully integrated “virtual life insurance,” which could be attractive for influencers.

  • 3. ESG devotees

    Some businesses view environmental, social and governance (ESG) as primarily a regulatory matter, but more consumers are putting their money where their values are. Specifically, they want to do business with environmentally and socially engaged companies and avoid those that are greenwashing. They are willing to pay a premium for products and services that match their value.

  • 4. Bubble protectors

    More consumers want holistic and dynamic coverage for entire lifestyles or “bubbles.” Designing integrated coverage for autos, homes, health, microbusinesses, appliances, travel, identities, and major new purchases is complex, but offers plenty of new revenue and stronger long-term relationships for insurers that get it right.

  • 5. Data capitalists

    Consumers are increasingly aware of the value of their personal data and expect more in return for sharing it. Insurers can engage this segment via customized offers, proactive insights for risk prevention and protection management with a portfolio of coverages that changes based on life events. The first step, though, is full transparency about data usage.

  • 6. Minimalists

    Looking to win entry-level business with budget-conscious consumers requires simple, understandable policies that are affordable and available via intuitive digital experiences. The end goal is to engage these customers for the long term, broadening and deepening the relationships as bigger risks emerge in their lives. By demonstrating the value of insurance and proving it can be affordable, insurers can both grow their business and protect the underserved.

Small Businesses

  • 7. Work-life integrators

    By offering tailored protections for gig workers and small home-based businesses, insurers can boost their relevance with solutions that reflect how people live and work today. Such coverages must be easily adjustable and reasonably priced, and solutions for gig workers in specific sectors and roles (e.g., delivery and graphic design) are likely to gain traction.

  • 8. Efficient entrepreneurs

    Today, commercial insurance options don’t necessarily reflect the huge number and diversity of small- and medium-sized enterprises. The priorities for helping small businesses manage proliferating risks are real-time cyber insurance, plus monitoring and recovery services, and real-time, dynamic and usage-based pricing for certain operations. Every small business will appreciate 24/7 digital support and access to expert advice when necessary.

  • 9. Conscious owners

    Like the ESG devotees in personal lines, small-business owners are increasingly focused on sustainability. These customers are most drawn to insurers that have sector-specific expertise and services that help them further “green-up” their businesses. An authentic commitment to ESG and true depth of understanding of the risks they face, along with ecosystems of solutions to cover those risks, will drive further engagement and loyalty.

Though not every insurer will serve the full range of customers, those that put customers at the core of their business will gain a competitive edge. They’ll also need to master a few crucial capabilities:

  • Real-time risk protection: AI, machine learning, automation, digital platforms and data analytics enable insurers to deliver personalized protections and services – instantaneously and at scale – in homes, vehicles or anywhere.
  • Ecosystems and partnerships: As industry lines blur and barriers to entry fall, insurance will become ubiquitous for all types of purchases and companies; insurers can orchestrate their own ecosystems and embed in those led by others.
  • New risks necessitating new products: Evolving societal norms and cultural values – from the rise of ESG issues to personal data ownership to virtual worlds – have created new risks and thus require product innovation from insurers to provide the necessary coverages.

Senior industry executives have been asking: How can we make sense of and navigate these trends in pursuit of growth? It starts with envisioning how to meet the changing needs and expectations of different customers by developing intelligent micro-segmentation and hyper-personalization capabilities, aligning offers, operating models and transformation investments to win in a hypercompetitive environment.

Our report also recommends specific actions for insurers so they can take advantage of the growth opportunities in an increasingly dynamic market. By engaging the right people and talent, integrating data, upgrading technology and streamlining processes, insurers can improve performance within every function. The highest returns will come from changes that link efficiency gains with experience enhancements.

(Thank you to Jeff Wenger, Americas Insurance Distribution Optimization Leader, for his contributions to this article.)


During the last several years, the urgency around customer centricity in insurance has only increased, thanks to constantly rising consumer expectations. As the industry continues to evolve and competition intensifies, customers will be the guiding light. The winners in the next wave of insurance will be firms offering new solutions precision engineered to meet a broader range of customer needs and deliver value via personalized offerings and rich experiences.

About this article

By Chris Raimondo

EY Americas Insurance Technology Leader

Passionate about building a better working world. Helping insurers modernize and solve complex business challenges through technology and innovation.