Many parts of the insurance sector, which have previously been marred by legacy technology, are now undergoing rapid digital transformation. AI, automation, and embedded insurance are just some of the technologies driving change in everything from underwriting and claims to customer engagement, leading many industry firms and leaders to rethink their approach.
Although emerging technologies, such as AI, automation and embedded finance, are having huge impacts on every aspect of the insurance industry, many consumers still have gripes with the sector.
But what features are most in demand that the insurance sector is still lacking? To find out, we asked industry participants what they’re currently hearing calls for the most.
Lacking real-time capabilities
“Significant progress has been made in improving the overall customer experience. However, there are still gaps between customer expectations and the services currently offered by insurers,” says Manoj Pant, senior director, strategy and business development at Pegasystems. “A major disconnect lies in the demand from high customer expectations on instant digital services, but many insurers still lack real-time processing capabilities for claims, policy changes, and inquiries.
“There’s also a shortfall in true personalisation. While customers desire tailored experiences based on their individual risk profiles and preferences, insurers often continue to offer generic products and communications. The demand for personalised, proactive communication—such as tailored service updates and loss prevention advice—is still in its early stages and may take considerable time to become a mainstream capability within the insurance industry.
“Self-service is in high demand, with customers wanting the ability to manage their insurance relationship independently through robust digital portals, but many insurers are still lagging in offering comprehensive digital self-services. Furthermore, the claims experience remains fragmented, requiring customers to repeat information across multiple touchpoints despite technological advancements.”
Lifestyle-led insurance
Dean Standing, chief revenue officer at Sagacity, says that consumers want insurance offerings that are built around their lifestyle.
He explains: “Price comparison sites have commoditised insurance, but customer expectations are shifting toward tailored, lifestyle-led products. First-time buyers may want buildings-only cover without contents. Expats need car insurance that accounts for overseas driving. Younger, budget-conscious customers seek flexible policies that can evolve with their finances.
“This shift opens the door for customer lifetime value strategies. By using data to understand different life stages and needs – from upgrading to a family car to adding pet cover – insurers can deliver dynamic products that grow with the customer. This not only drives upsell potential but builds long-term loyalty.”
Several missing features
Vincent Audoire, CTO and co-founder of Feather Insurance, an insurance company specialising in supporting expats in Europe, shares what customers “consistently ask for”.
“Transparency and simplicity. Most insurance products are still unnecessarily complex and opaque. Customers often don’t fully understand what they’re buying or what’s actually covered, with many still struggling with hidden fees and complex language. The industry must offer clearer and simpler policies in plain language, and ideally in other major languages for international residents.
“Flexible, customer-centric contracts. Traditional insurance is designed for people with stable, long-term plans – but today’s customers are mobile and need flexibility. Customers today want month-to-month options, the ability to pause or cancel easily, and to change coverage dates without penalties. Flexibility around life events like visa delays, job changes, or relocations is still a rarity.
“Digital convenience without the paperwork. Customers expect the digital ease they’ve come to rely on in banking or e-commerce, yet many insurance providers still rely on paper forms and physical signatures. People want full digital onboarding, in-app claims handling, real-time support, and automatic policy adjustments.
“Better claims experiences. Filing a claim is often one of the most stressful customer experiences in insurance, but importantly, it’s where trust is either won or lost. Particularly in times of high-stress, customers want hassle-free claims resolution with clear status updates and human support if needed. Many insurance providers still struggle here and processes need to be updated to integrate with older legacy systems.”
Increasing the value of insurance
“There are a lot of things lacking,” adds Rory Yates, global strategic lead at EIS. “Everything from digital first experiences, to meaningful propositions that help, nurture and pay out when something goes wrong, to customer experiences that show empathy when it matters most.
“One of the biggest issues is that insurers focus on ‘features and functions’ in the first place. This potentially risks optimising something that at this stage probably shouldn’t exist in the first place.
“The reality is that insurers are not trusted, and that’s because most focus on taking a premium in the hope (and sometimes in the way they are engineered) to not pay out. That makes them transactional, at best. With some still saying silly things like ‘the best insurer is invisible’.
“What we need is insurers that don’t simply maximise distribution and minimise costs, or build one-off policy-based systems and relationships. Instead, we need insurers that maximise the knowledge of their customer and the ability to act on that knowledge. This will create insurance that is valuable to customers all the time, and will see those customers value their insurers all the time in return.
“When insurance can organise itself around people, not policies, and architect its culture and enabling technologies around adaptability, agility, and data-fluidity, we will see a new paradigm emerge. That paradigm will be built around new value in new products and services, delivered in a new working model that fuses people with the ability to utilise new technologies at will without creating a reliance on these systems.”
Making insurance faster, more intelligent, and flexible
Scott Thomson, insurance solutions director at FintechOS, shares the biggest gaps he sees persisting in insurance offerings. “The biggest gap is intelligent, contextual insurance that adapts to real-time circumstances. Customers want dynamic coverage that adapts to their actual lifestyle and usage.
“Take car insurance. We’re still mostly stuck with annual policies that don’t care if you’re a weekend driver or daily commuter. Telematics APPS and physical devices have always supported this approach, but applications of the collected data have been limited. People want coverage that adjusts based on weather conditions and driving routine.
“Claims processing is still painfully manual. People expect to snap a photo, get an AI-powered assessment and then receive instant payouts for straightforward cases. Submit through a voice message and receive a settlement in minutes, without weeks of back-and-forth paperwork.
“The other big area that is missed is life event integration. Insurance should automatically adapt when people move, change jobs, get married or have kids. Currently, customers must manually update their information when major life changes occur. That’s when they need coverage most, and we’re making it harder for them.
“The insurers that solve these gaps will own the embedded insurance space. Those who still treat insurance as a static, separate product will be watching from the sidelines. The insurance industry is slowly moving towards one product, one policy and one price that dynamically adjusts as your lifestyle adjusts, and insurers best get on board.”
