A digital blueprint for transforming life insurance customer experience

Customer dissatisfaction is a dire issue in the life insurance sector. A recent global survey report found nearly half of policyholders are unhappy with their experience. To many, this will be no surprise. Most companies in the life insurance sector – from carriers to distributors – understand the challenges at hand, but still the pace of change remains slow. Either industry participants are unsure of the how, or the prospect of transformation is too daunting. Or a combination of both. 

Life insurers and distributors urgently need to shatter their reliance on outdated processes, technology and overcome cultural resistance. Only then will they be able to revolutionize their technology and operating models enough to fix the customer satisfaction problem. 

Digital native customers demand speed, ease, and simplicity. Anything less and their business will be lost. Those companies that adapt to customer expectations for service and digitization stand to capitalize on their purchasing power.

Removing points of friction

Quick, frictionless progress is needed to keep prospects engaged during the buying process and meet expectations. Innovations like e-applications and e-signature solutions are already replacing off-putting, paper-based processes. But true efficiency also depends on the underwriting process. 

Central to enabling smooth customer experiences is the act of moving crucial underwriting decisions closer to the front of the onboarding workflow. With the right technology linking carriers to advisors, customers eligible for automated or accelerated underwriting can be quickly identified. Analytics can offer intelligent recommendations and clear communication, keeping customers on their journey with greater clarity.

AI and predictive analytics can play a huge role in making this process the new standard, by fast-tracking lower risk applicants for automated underwriting. Not only does this secure more business, but it also reduces the time and money spent on underwriting resources. In life and annuity, where new customer growth is central to insurers' strategies and their stability in absorbing risk, carriers are willing to take on more risk to win business. The desire for a slick customer acquisition strategy exists. Now the technology to make it a reality needs to be deployed.

Automated underwriting coupled with a smart, AI-powered identification process means that underwriting resources can be devoted to only the more complicated applications, saving human attention for where it is required. But with the caseload reduction that automation can bring, even complex cases should become more efficient. Meanwhile, those that qualify for automation will benefit from a policy issuance time that lasts minutes, not days. 

For customers not eligible for automated underwriting for a specific product, advanced data technology can be used to help advisors efficiently inform them of a product for which they would be automatically approved. For life and annuity distributors, this kind of technological assistance is akin to a car salesman keeping potential customers on the lot. If one option isn't right, technology and data support finding another that is.

Personalized product recommendations 

Consumers want to be treated as individuals, not just numbers. Today, this means experiencing personalization when making decisions about their financial futures. 

This is a tall order, but technologies like digitized workflows and AI have the potential to make personalization the norm. These innovations enable the life and annuity ecosystem to inject data intelligence back into client workflows to better understand customers, enabling carriers and distributors to identify potential areas for growth and make personalized policy recommendations.

Empowering financial literacy

At the same time, technology can be used to empower financial literacy by demystifying complex products and providing understandable information. This will serve as an increasingly valuable customer service component as L&A products are notoriously complicated for most Americans – and confusion is the enemy of sales.

LIMRA reports that the second main obstacle for consumers purchasing life insurance is a lack of understanding of what they need and how these financial products function. 

Today, the industry is experiencing a massive life insurance gap while annuities continue to boom, bringing opportunity. Yet to take advantage of this, carriers and distributors must commit to providing clear information. Data management and illustrations technology can help educate the consumer at every touchpoint, from onboarding to servicing and claims. By using predictive analyses and automated visualizations to game real-time scenarios, firms can provide the guidance consumers need to build confidence with life and annuity products. 

The era of self-service

Today, high-quality customer experience also means helping customers help themselves. Tools such as a large language model (LLM) chatbot can be used to help agents and advisors provide instant answers to questions about complex financial products. By digitizing lengthy and complicated documents and leveraging technology that can learn and intelligently distill this information, distributors can eliminate the need for a customer to turn to a call center, or worse, abandon the process. 

Building a connected data infrastructure

The 2025 World Life Insurance Report revealed that 66% of U.S. life insurers named legacy system dependency as their top challenge in delivering a superior customer experience. When digitizing core systems, it's crucial to prioritize an interconnected ecosystem for seamless data flow, empowering all related functions. Many in the industry continue to struggle with integrating multiple accumulated point solutions and are instead challenged with fragmented systems and disparate datasets that hinder the ability to deliver fast, frictionless, and personalized service.

Win the race to true customer-centricity

When it comes to digital transformation, the life and annuity industry is decidedly behind other insurance lines. However, it is increasingly motivated to explore digital transformation.

But the clock is ticking to meet customer demands and understand their needs.  Buyers are increasingly unwilling to tolerate drawn-out processes, so implementing digital business practices is essential if this corner of the protection market hopes to protect not just its customers, but its own future too.