The promise of automation has long been a double-edged sword. On one side, it brings speed and efficiency to processes that once felt slow and cumbersome. On the other side, there's a fear that automation might erode the human touch — an essential element in industries like insurance, where trust and empathy play critical roles.

What if automation didn't have to replace the human element but instead made it stronger? Enter "humanomation" — the blending of human interaction and automation that allows companies to achieve both efficiency and empathy. As artificial intelligence and automation continue to reshape the insurance claims process, the real opportunity is to enable people to focus on what they do best: serving policyholders with understanding, insight and care.

AI as a Support System, Not a Replacement

Automation has brought undeniable benefits to claims handling — speed, accuracy and cost reduction. But its true value lies in its role as a support system for human workers, rather than a replacement. It's about taking routine, repetitive tasks off the table so people can focus where their attention matters most.

Imagine a claims adjuster spending hours sifting through paperwork, manually inputting data or hunting down information from disconnected systems. AI can seamlessly handle these administrative tasks, allowing adjusters to focus on more nuanced, high-touch interactions. This balance is critical, as 77% of consumers still prefer human interaction when dealing with more complex claims.

It’s not about replacing people; it’s about freeing them to connect with customers during the moments that matter.

Creating Seamless Connections Through Data

Automation not only streamlines operations but also allows carriers to better connect disparate pieces of information. Claims data often exists in silos, disconnected from other crucial details like policy terms, medical information or external data sources. AI can serve as an orchestration layer, integrating data and making it easily accessible and actionable.

By creating this layer of connection, carriers can test and integrate new data sources without overhauling their entire system. A flexible infrastructure — featuring a data configurator and adaptable application programming interface (API) — enables real-time experimentation, helping carriers refine and improve their claims processes with agility.

This innovation gateway allows carriers to deliver a modern claims experience without sacrificing what already works. It's not about disruption. It's about finding new ways to leverage data to provide smoother, more accurate claims handling. 

The Future: Blending Speed and Empathy for Modern Consumers

Today's consumers have different expectations than they did even a decade ago. They demand speed, transparency and convenience in every interaction, and their patience for cumbersome processes is thin. Automation addresses these demands by making claims processing faster and more efficient, but it's the human touch that sets the experience apart.

This is where humanomation shines, merging the efficiency of AI with the empathy and understanding only humans can provide. The future of claims isn't just about automation for the sake of speed; it's about creating a customer experience that is efficient and empathetic, responsive to the needs of today's consumer.

For carriers, getting this balance right can mean the difference between retaining loyal customers and losing them to a competitor. The claims process has always been a moment of truth in the insurance journey, and now, more than ever, consumers expect that moment to be fast, seamless and human. Humanomation makes that possible, enhancing the customer experience without losing sight of the personal connections that build trust.

The "Future of Claims Think Tank Series" by Benekiva is available here. 

Customer retention is imperative in any business, including insurance. As the saying goes, "If your retention rate is poor, nothing else matters."  

Lead generation and acquiring new consumers are important, of course, but studies show that increasing customer retention by only 5% can translate to profits increasing by 25% to 95%. Policyholder retention is not only about maintaining revenue but also about improving trust and building long-term relationships. Loyal customers are more likely to renew their policies, be open to cross-selling opportunities and be brand ambassadors for insurance agencies.

Automated SMS marketing is a powerful tool that improves policyholder loyalty by keeping policyholders informed, engaged and satisfied. 

See also: How AI is Redefining Insurance Pricing Strategies

What is Automated SMS Marketing?

Automated SMS marketing means sending pre-scheduled text messages to policyholders. These messages can be updates, reminders or promotional content. Automation ensures that the right message is sent to the right person at the right time, with minimal effort.

Benefits of Automated SMS for Insurers

Automated SMS marketing offers the following benefits to insurance companies:

• Improved Efficiency: Automation does not require manual intervention. Once the campaign is set up, it runs independently, ensuring consistent communication with policyholders.
• Cost-Effective Communication: SMS itself is a cost-effective communication channel. With automation, insurers can reach thousands of policyholders without additional resources.
• Instant Engagement: SMS offers real-time engagement. Messages are delivered instantly, whether it is a reminder, emergency alert or update.
• Improved Customer Satisfaction: Timely and relevant messages show that insurers care about their customers' needs. Satisfied customers are more likely to remain loyal.

How Automated SMS Marketing Helps in Policyholder Retention

SMS marketing is direct, personalized and universally accessible. SMS offers approximately a 98% open rate and 45% response rate, speedy delivery and personalization. Therefore, automated SMS campaigns can keep policyholders satisfied, informed and engaged when done correctly.

Sending Timely Policy Renewal Reminders

The main reason behind the decreased policyholder rate is missed renewals. Automated SMS makes sure that customers never miss deadlines. Sending reminder SMS like this in advance ensures existing policyholders stay on track: "Hey, [customer name], your insurance policy is due for renewal on [date]. Renew now and enjoy uninterrupted coverage. Click here to renew – [link]"

Educational Campaigns

Generally, policyholders don't completely understand their coverage. You can use SMS to send tips, policy information and updates: "Did you know? Your home insurance policy covers fire damage. Click here [link] to review your policy details." Sending educational automated SMS empowers policyholders to make informed decisions while reinforcing the importance of the policy.

Frequent Claim Updates

Claims processing is a stressful process. Frequent updates through SMS improve policyholders' experience. Insurers can reduce anxiety and build trust among policyholders with SMS like this: "Your claim [number] has been approved, and you can expect payment in [number] business days. Need help? Reply 'HELP' or call us at [phone number]." 

Loyalty Rewards and Discounts

Rewarding long-term policyholders enhances loyalty. Through automated SMS, insurers can promote exclusive discounts and perks. An automated SMS like this shows appreciation and creates a positive experience for policyholders that encourages retention: "Congratulations on being our valued customer for [number] years! Enjoy [number]% off on your next renewal. Click here – [link]"

Tailored Policyholder Check-Ins

It is not necessary for each SMS to be transactional. Automated SMS can be used to check in with policyholders periodically. Sending SMS like this shows care and strengthens the relationship: "Hey, [policyholder name], we hope you're doing well! Do you have any questions about your coverage? Reply 'YES' and we'll assist you"

See also: Why Hasn't Insurance Automated More?

Automated SMS Maximizes Efficiency

When insurers manually manage SMS campaigns, it can be overwhelming. Automation simplifies message scheduling for reminders, updates and alerts. Automated SMS marketing platforms come with features such as segmentation and targeting specific customer groups with tailored messages. Such platforms also help track performance through metrics such as response rates and open rates to refine campaigns.

Automated SMS Marketing Future in the Insurance Industry

With cutting-edge features, SMS marketing will become a more integrated part of policyholder retention strategies. Features such as AI-driven personalization and SMS conversations through chatbots will refine how insurers interact with policyholders.

Closing Thoughts

In a nutshell, automated SMS marketing is more than a tool. It is a game-changer for policyholder retention. Insurers can build stronger relationships and improve customer loyalty by delivering timely, relevant and personalized messages. All they need to do is invest in the right automated SMS marketing platform and align campaigns with policyholder needs.

Remember, staying connected can make all the difference. In the competitive insurance industry, retaining policyholders is not only about selling policies but is about creating lasting connections.

Most insurance carriers are focusing on opening new revenue channels by expanding their digital distribution, with particular emphasis on embedded insurance, leveraging their assets built over the years to gain a competitive edge.

According to a recent Gartner report, establishing digital platforms for ecosystem partners and customers is one of the top priorities for insurance CIOs in 2024.

With partnerships driven by application programming interfaces (APIs) becoming increasingly common among large personal and commercial line carriers, insurance CIOs face the challenge of introducing disruptive partnership approaches to the market to achieve a true competitive advantage.

This article discusses embedded insurance use cases, prevalent partnership approaches and technology solutions.

See also: Embedded Insurance: A Major Disruptor

Embedded Insurance Use Cases

Embedded insurance is emerging as a highly effective digital distribution model, gaining traction due to the increasing relevance of ecosystem-based business models. Insurance companies are recognizing the potential of this strategy to drive distribution revenue.

Here are a few examples:

• An auto insurance company partnering with another insurer to sell jewelry insurance.
• An auto manufacturer collaborating with an insurance carrier to sell auto policies tailored to specific customer segments.
• A small business SaaS provider teaming up with an insurer to offer professional liability coverage.
• Retailers offering extended warranties as part of product sales.

Partnership Models

The two most prevalent partnership models for embedded insurance are API-driven and co-branding partnerships.

• API-Driven Partnerships: APIs are playing a pivotal role in extending a carrier's product value chain capabilities to partners, with quote-and-bind APIs being major revenue drivers. Many carriers are building distribution API platforms that consist of APIs, a partner onboarding portal, a composable service layer and API lifecycle management automation. Partners can leverage these APIs to integrate the carrier's capabilities into their own platforms, enabling a seamless experience. However, this model often requires substantial development effort from the partner's side.
• Co-Branding Partnerships: Carriers provide co-branded microsites, which can be embedded directly into a partner's website, offering a seamless, branded experience with minimal effort from the partner.

Disruptive Partnership Models Being Adopted:

Carriers offer quote web themes similar to WordPress themes, enabling independent agents and brokers to integrate them into their websites to enhance the customer experience.

Challenge: Time-to-Market

Due to the lack of an automated or accelerated process for developing and managing co-branded websites, time-to-market is often delayed for both product launches and partner onboarding.

Solution: Composable Commerce

Composable web architecture (also known as composable commerce) not only addresses these challenges but also accelerates product additions and partner onboarding processes.

1. Composable Commerce Platform: This platform enables partners to build co-branded quoting sites (also referred to as digital storefronts) by using templates and themes provided by the insurance carrier. Partner developers can deploy and test their storefronts after composition.
2. Microsites and Serverless Workers: Composed sites are deployed as isolated serverless workers, with client-side static content hosted in multi-tenant storage and styling stored in a centralized CMS. Partner-specific metadata is stored in a database, ensuring high availability, fault tolerance and agility in addressing partner concerns. These serverless workers, referred to as micro-front-ends, handle specific business capabilities based on the single responsibility principle. This enhances flexibility and reusability. 
3. Backend for Front-End (BFF): BFF may be implemented if additional composition is required for the front end.
4. Product APIs: These APIs expose value stream functionalities specific to each product and maintain multi-tenancy at the product level.
5. Partner Metadata: This is fed by the commerce platform and used by the microsite for partner validation, content retrieval and routing.
6. CMS Integration: The CMS contains both carrier-specific and partner-specific content, exposed via APIs and consumed by the hosted microsites.
7. API Portal: A self-service portal that allows partners to subscribe, explore and test APIs independently.
8. Distribution API Layer: Although an additional wrapper on top of product APIs, this layer resolves quote workflows for partners, decouples partner-specific concerns, and facilitates consumption tracking and monetization.

See also: Embedded Insurance and the On-Demand Economy

Key Benefits of Composable Commerce Solution

• Faster onboarding of embedded insurance partners
• Self-service capabilities for partners to compose digital quoting experiences
• Quick expansion into new market segments
• Accelerated product launches

For decades, the insurance industry has been known for its cautious approach to embracing technological change. While other sectors raced ahead with digital innovation, insurance remained rooted in traditional practices, often slow to evolve. However, with the inexorable rise of artificial intelligence, insurers now have an opportunity to break free from this legacy and transform their operations.

The real question isn't whether AI can revolutionize insurance – it can. The question is how we can leverage this transformative technology without losing the essence of what makes insurance truly valuable: the human touch.

AI must serve to amplify the personal connections that customers rely on, not replace them. The future of insurance lies in finding the delicate balance between embracing technology while preserving the trust and empathy that define meaningful customer relationships.

Meeting Rising Customer Expectations: Speed vs. Personalization

Strides have already been made in the industry with the advent of online claims processing in the last decade. AI will take this to the next level, automating repetitive tasks and enabling claims to be processed far faster. This speed is no longer just a luxury – it's the baseline. Yet, while efficiency is critical, it's only part of the equation.

Modern customers expect more than fast service; they demand personalization. In a landscape where pricing is transparent and standardized, the ability to tailor products and interactions has become the ultimate competitive advantage.

Policyholders today want solutions that reflect their unique circumstances. They want recommendations designed with them in mind and interactions that make them feel seen and valued. Insurers must integrate this ethos into every touchpoint, creating an experience that feels both efficient and personal. AI, therefore, must also enable deeper and more meaningful connections.

Chatbots Must Augment the Agent Relationship, Not Replace It

Chatbots are the most obvious first application of AI in the insurance industry, and with good reason. They excel at handling routine inquiries, such as retrieving policy numbers or answering basic questions, and are well-received by customers – 87% of consumers rate their interactions with bots as neutral or positive.

But insurance is built on trust, and trust requires a human connection. While chatbots are invaluable for efficiency, they cannot replace the empathy and expertise of a human agent.

For repetitive tasks, such as processing straightforward claims, chatbots come into their own. Imagine a customer drops their phone and submits a photo of the damage via a chatbot, and the AI processes the claim for a cracked screen in seconds. This level of automation will be a key driver of customer satisfaction.

However, complex scenarios – such as disputed claims or a breach of personal data – demand a human touch. In these cases, AI can gather initial details and seamlessly hand the case off to a human agent. This ensures that customers receive personalized guidance and support when it matters most.

The ideal approach is a partnership between AI and human agents. Chatbots handle the routine, freeing human agents to focus on high-value interactions that require empathy and expertise. It's not about replacing people; it's about empowering them to deliver exceptional service at scale.

How AI Can Drive Even Greater Personalization

While AI is transforming operational efficiency, its real potential lies in delivering hyper-personalized customer experiences. Achieving this requires insurers to think beyond claims history and harness data from a variety of sources.

The true power of AI lies in its ability to turn vast amounts of data into insights that enhance every touchpoint of the customer journey. The future of insurance is moving beyond reactive claim processing to proactive risk mitigation. This personalized approach ensures that customers are neither undercharged nor overcharged based on each specific need. Imagine leveraging data from Internet of Things devices in a customer's home to alert them about potential water damage risks. Or, for mobile phones, AI will be able to analyze usage patterns, environmental factors and customer behavior to offer personalized protection plans.

AI-driven predictive analytics will allow companies to anticipate their customers' needs before they even realize them themselves. It allows customers to consider moving beyond the standard insurance policies that have become ingrained into society. By providing predictive analysis to customers, AI will allow them to see that their mobile phone or household appliances should also be insured specifically. This shift from a transactional relationship to a consultative partnership is where the real value lies.

Looking forward, AI has the potential to reshape the entire customer journey – from identifying risks to designing policies and providing real-time support. It has the potential to take insurance from something customers just have, to a holistic support system for a customer's time in need.

The future belongs to insurers that can achieve this balance, leveraging AI to deliver efficiency while strengthening trust and empathy at every interaction. By blending the precision of technology with the all-important human connection, the insurance industry can create experiences that are both innovative and deeply personal.

Artificial Intelligence (AI) is poised to fundamentally change the insurance industry, particularly in underwriting. The swift progress in AI technology is requiring insurers to reevaluate conventional methods and adopt a future characterized by speed, precision and personalization. This major change raises an important question: How will AI in insurance underwriting reshape processes, expanding possibilities beyond our previous expectations?

AI in Modern Insurance Underwriting

AI is changing how underwriting works faster than ever. Insurers now use real-time data from Internet of Things (IoT) devices to look at driving habits, property conditions and environmental factors. This helps them build risk profiles that are always up to date. Take telematics in cars. Insurers can keep an eye on how people drive and adjust premiums based on what they actually do instead of relying on old models.

AI is also shaking up claims processing. It automates responses and uses data from IoT sensors to quickly assess incidents. If there's a car accident, real-time information goes straight to insurers, cutting the time needed for manual assessments.

These innovations will redefine underwriting and change the insurance world altogether. The blend of AI and IoT isn't just a minor upgrade; it's an overhaul of how insurers work, leading them toward a future where efficiency and accuracy take center stage.

See also: Automated Underwriting: A New Era of Work

Advantages of AI-Powered Underwriting Systems

AI-driven underwriting systems are introducing significant advantages that change the way insurers connect with their customers. A key aspect is hyper-personalization, where AI evaluates large datasets to create customized policies suited to individual preferences and lifestyles. This method enables insurers to implement dynamic pricing models that can adjust in real time based on data from IoT devices.

Furthermore, generative AI improves customer interactions by enabling personalized communication that aligns closely with client needs. For example, insurers can produce tailored video content that explains policy options in a manner specific to each customer's circumstances, enhancing comprehension and satisfaction.

As these technological advancements are adopted, AI serves not only as a tool for improving efficiency but encourages insurers to reevaluate their strategies and product offerings in a competitive marketplace.

Machine Learning Models in Risk Prediction

Machine learning (ML) is increasingly becoming a crucial tool. A notable development in this field is federated learning, which allows insurers to refine their risk assessment models while maintaining the confidentiality of customer information. This method facilitates collaboration among various organizations to enhance ML algorithms without the need to exchange sensitive data, transforming risk evaluation across different demographics.

Additionally, ML is proficient at identifying macroeconomic risks that can influence specific sectors within the insurance industry. By examining extensive datasets related to factors such as inflation and climate change, ML models can predict how these elements might affect claims and underwriting processes. This forward-thinking approach empowers insurers to modify their policies and pricing strategies proactively, rather than simply responding after issues arise.

AI and ML App Development for Insurers

AI and ML are changing the game in app development for insurance underwriting. New apps aim to build a system that improves decision-making and keeps customers engaged. Picture underwriting apps that let insurers monitor claims in real time. They can see how claims progress and act quickly, speeding the process and helping manage risks before they become problems.

Also, AI chatbots can boost customer service. They answer questions right away, guide applicants through tricky steps and give underwriters useful insights from large datasets.

Insurers need to team up with app developers to make this change happen. By joining forces with AI and ML development solutions providers, insurers can tap into what AI and ML offer to create tools that make underwriting smoother while adjusting to what the market needs.

See also: Cautionary Tales on AI

Enhancing Customer Experience With AI

AI is revolutionizing how we think about customer experiences, creating models that can accurately predict what each person needs. By using sophisticated algorithms, insurance companies can foresee changes in customer requirements and suggest policy updates before clients even realize they need different coverage. For example, if a customer's data shows they've landed a new job that involves commuting, AI can swiftly recommend adjustments to their auto insurance.

Another breakthrough fueled by AI is the removal of bias in underwriting processes. By applying contextual algorithms that sift through various datasets, insurers focus only on the relevant details for assessing risk. This approach moves past outdated factors like age and gender, which often skew results unfairly. Instead, the algorithms ensure that every applicant is judged on their unique risk profile.

As these technologies continue to advance, hyper-personalization becomes more achievable. Insurers are now able to design tailored policies that align with individual preferences while also reflecting larger societal trends. By tapping into AI's predictive power, insurance companies can create experiences that truly resonate with customers—leading to greater satisfaction and loyalty all around.

Data Integration and AI

The convergence of real-time data analytics and artificial intelligence is poised to transform insurance underwriting by facilitating real-time modifications to risk assessment models. The use of live data will be fundamental to this transformation.

Geospatial Insights:

Insurers will leverage geospatial insights for precise risk evaluations, allowing them to respond proactively to shifts in environmental factors. For instance, real-time satellite imagery can provide timely information regarding natural disasters, enabling insurers to revise policies based on current risk assessments.

Decision-Making Efficiency:

Underwriters can make prompt and informed decisions, ensuring that coverage remains applicable as conditions change.

Future Developments:

The emergence of decentralized data ecosystems is anticipated to further refine underwriting methods. Such networks would enable secure sharing of information among key stakeholders—insurers, regulators and customers—while maintaining privacy standards.

See also: The Underwriter 2.0, in the Era of AI

Challenges in Adopting AI in Underwriting

Tackling the hurdles of AI in underwriting calls for a forward-thinking strategy that blends creativity with a strong sense of ethics. Protecting data privacy is crucial as insurers manage sensitive information, all while following important regulations like the General Data Protection Regulation and California Consumer Privacy Act. To build trust, companies must be open about how they use data and ensure their security measures are top-notch.

One practical approach is to boost AI knowledge within organizations. By teaching employees about AI's potential, companies can ease worries about job loss and spark innovation—much like learning a new language, where understanding opens doors instead of closing them.

Using regulatory sandboxes gives insurers the chance to experiment with AI solutions in safe settings, allowing them to stay compliant while testing new ideas without facing immediate consequences—similar to pilot programs that refine processes before rolling them out on a larger scale.

Future-Proofing Insurance Underwriting for 2025

The future of AI-enabled insurance underwriting promises remarkable advancements with quantum computing on the horizon. This technology will revolutionize risk modeling by enabling insurers to analyze complex datasets at unprecedented speeds—imagine algorithms processing vast amounts of information within seconds for real-time adjustments based on evolving risks.

Additionally, autonomous AI systems could transform underwriting processes by making decisions almost instantaneously—picture an AI evaluating an application, assessing risks and determining pricing within moments while continuously learning from new data inputs.

As insurers collaborate with tech innovators harnessing these capabilities, smarter and more responsive underwriting systems become a reality.

The insurance industry is on the brink of a major shift, driven by advancements in quantum computing, smart systems and AI in insurance underwriting, enabling rapid decision-making. These new technologies promise to deliver incredibly precise risk evaluations that we could only dream about before. Plus, they'll help companies operate more efficiently and keep customers happier.

As 2024 winds down, and as most executives are excited (and obligated) to do, I’m looking ahead to see what the future has in store for the industry. Here at insured.io, we’re all about enhancing the customer experience—and we’re also big on listening to what customers want. This year, we conducted a major survey to find out how customer expectations have changed, and, to quote me from 2023, “CX matters more than ever.” We see many of our anticipated trends from 2024 come to fruition, chief among them being the continued rise of the mobile device as the preferred way to interact with their insurance policy, with 80% of people wanting to use their device for routine tasks. In an ever-evolving industry (if you attend Insuretech Connect every year, you know), continuing to pay attention to the evolution of customer expectations is increasingly vital.

Here are my top 7 predictions for the next year:

User Experience Matters More Than Your Brand

We’ve known for a while that user experience (UX) is increasingly important to the average consumer. As people spend more time with top-tier apps that prioritize UX, expectations shift—even in the insurance world. Sure, coverage and price still top the list, but our survey shows that UX now ranks nearly equal to brand in how consumers pick their carrier. Customers aren’t just choosing based on the premium or a recognizable logo—they’re actively seeking insurers that deliver a top-notch digital experience. Expect your brand to take a back seat to experience in 2025, which is aligning itself in importance with price as consumer expectations continue to change.

Mobile Reigns Supreme, All Hail Mobile

With half a million registered users on our platform across all lines of business, we’re pretty confident that the desktop is going the way of the dinosaur. A full 86% of our users accessed their policy from a mobile device, trending up from 2023, meaning if you’re not delivering an exceptional mobile experience, you’re missing the mark. Millennials often prefer making “big purchases” on a desktop, but insurance clearly isn’t in that category. Over 80% of our survey respondents said they’d rather manage their policy from their phone. The exception to this, of course, is claims. Keep reading.

The Claims Experience Gets a Facelift

Here’s the reality: your Google and Yelp reviews don’t reflect how good your underwriting is. The impression of your company is primarily driven by the quality of your claims experience. The claims process is stressful and confusing for many people, which is why fewer than half prefer submitting claims on a mobile device. So far, most companies haven’t optimized claims for today’s mobile-savvy user, and it shows. Simple updates—like notifying customers of their claim status, a service even Domino’s can handle for pizza orders—are in high demand. Nearly 60% of respondents said they’d switch companies to get real-time claim updates. It’s past time for a claims overhaul, and carriers know it. In 2025, expect a renewed focus on simplifying the intake experience—making it more automated, less stressful, and more user-friendly. Keeping customers informed and in the loop will be a top priority.

Tech-Enabled Carriers Get a Big Boost

Earlier this year, we predicted that major insurers pulling out of states like California would create a golden opportunity for mid-tier carriers. Not only were we right, but the growth has been even more dramatic than expected. We’ve seen a serious expansion in 2024 from carriers prepared to take on the wave of newly available business—and those ready to step up have reaped the rewards. Expect this to continue in 2025, as larger carriers remain cautious in certain geographic areas and smaller, UX-savvy carriers continue to fill the void. 

Embedded Insurance is a Game-Changer

Interest in embedded insurance surged this year. Customers want more options and flexibility in buying insurance, fueling a wave of unique, micro-focused products tailored to their needs. These mini-policies are starting to find their way into workflows we wouldn’t have imagined a few years ago, and it’s only the beginning. We predicted Insurance Shopping Platforms would become more relevant, and in this case, many more non-insurance platforms in 2025 will begin to embed insurance directly within their workflows. In fact, in a survey by Adacta, nearly 94% of survey respondents view embedded insurance as a critical part of their future strategy.

IVR is Making a Comeback In a Big Way

With the resurgence of voice as an engagement channel, insurance organizations should examine IVR's relevance more closely. Emerging advances in AI, customer behavior analysis, and cloud-based telephony solutions will soon be able to solve many of the legacy challenges, making IVR systems relevant, highly engaging, and more efficient. Generative AI (GenAI) has the potential to completely reinvent the customer experience (CX) across the board, but most dramatically for voice. By eliminating the dependency on static scripts and harnessing the power of natural language processing (NLP), GenAI will usher in a new era of personalized, efficient, and intelligent IVR systems.

AI is Poised to Take… The Passenger Seat 

This might be my hottest take. Despite the hype, the “Rise of AI” hasn’t exactly overtaken the industry as predicted. Yes, people are using AI (our new IVR voice, Ivy, is AI-generated), and plenty of folks are running their emails through ChatGPT for a quick polish. But a full AI revolution? Not quite yet. In fact, according to IDC Worldwide, only 68% of GenAI proof of concepts met KPIs, and an even smaller amount made it into production. For now, it’s more a helpful sidekick than a replacement for core operations. Carriers are starting to see AI for what it is: a powerful tool, not a one-stop solution. In 2025, we’ll see AI used more as a timesaver, efficiency booster, and experience enhancer, allowing carriers to improve what they already excel at, rather than as a catch-all fix. In 2026, however, all bets are off. 

About the author

Steve Johnson is the Co-Founder and Chief Product Officer at insured.io, a company focused on improving the customer journey and accelerating digital transformation for insurance organizations. Steve has led the charge in building insured.io’s unique and powerful platform, maintaining overall responsibility for the organization’s product, design, development, analytics, and marketing. Steve exhaustively reviews performance metrics, user behavior, and business needs to continuously innovate and deploy high-quality solutions. He is also an evangelist for the customer experience and believes thoughtful, unique, and personalized attention to the insured’s needs is paramount for carrier acquisition and retention.

Sponsored by: ITL Partner: insured.io

The auto world is in upheaval. It's making great progress on radically new technologies in electric and autonomous vehicles, but that progress is unsteady, and there is lots of uncertainty ahead on regulation, incentives, and tariffs as the second Trump administration takes shape.

In the midst of that upheaval, a key fact often gets overlooked: that much of the industrialized world — the U.S., Europe, Japan, and South Korea — appears to have reached "peak auto." In other words, the total of new car sales has crested and will decline from here, at least for years.

That change, highlighted in a recent report by a global group of auto executives, reflects significant changes in who's driving, how much they're driving, and the age of the cars they're driving. 

I think the report is worth a look.

The report, the first issued publicly in the 74-year history of the Global Leadership Conference, is meant to provide a wake-up call for national governments about the inroads being made by Chinese car makers and about recommended policy changes. The report says, for instance, that Chinese companies have a 35% cost advantage on electric vehicles (EVs), largely because of state subsidies both for the car makers and for the inventors and manufacturers of the batteries that are the vehicles' most expensive parts. In terms of all types of vehicle sales, the report cautions:

"Over the last five years, the Detroit Three automakers lost 6.6 points of global market share to Chinese automakers and EV startups.... Japanese automakers have lost 3.4 points of share, the Germans one point, while the Koreans have not lost any. China gained 8.2 points, and the EV startups—mainly Tesla—gained 2.1 points."

But who makes the cars matters less to auto insurers than the declaration of "peak auto." The report says the phenomenon "is particularly worrisome in the U.S., where new car sales are lower than they were a decade ago, even though the population of the country increased by more than 30 million people."

The cresting of new car sales reflects a number of trends. For one, fewer young people feel the need to drive. The Wall Street Journal reports: "The percentage of 19-year-olds [in the U.S.] with a driver’s license dropped steadily from 87% in 1983 to 69% in 2022, according to the most recent data from the Federal Highway Administration." The change reduces the frequency of accidents among inexperienced drivers but also likely means a long-term decline in the number of those who buy personal auto insurance, as they rely on ride-sharing and public transportation, instead.

Miles driven in the U.S. have increased only 5% since 2008, even as the population has grown 13%, again suggesting a long-term decline in the need for auto insurance. 

As car prices have climbed, people have been holding on to their vehicles longer. The age of the passenger car fleet in the U.S. has soared from roughly 12 years in 2017 to 14 years in 2024. The change in the composition of the fleet doesn't directly affect the amount of insurance needed but certainly changes what sorts of protection are needed and the kinds of claims that will be made.

If you're half as much of a business process geek as I am, you'll find plenty of other things in the GLC report interesting, maybe even maddening. For instance, it says that U.S. companies are still building expensive features into EVs that only matter in cars with internal combustion engines — including structural supports to dampen the vibrations from the movement of the (now-nonexistent) pistons and sealants to keep (the now-nonexistent) carbon monoxide from leaking into the passenger space through the trunk. 

But I really just wanted to note that we've reached "peak auto" and must confront that reality even as we deal with all the other upheaval in the vehicle world.

Cheers,

Paul

P.S. Two other milestones in the auto world reported in the past week:

• A universal EV charger is coming next year. That's a big deal because "range anxiety" and other concerns related to being able to charge have held back adoption. Having access to every EV makers' stations will reduce concerns. 
• Waymo just keeps expanding service for its autonomous robotaxis. In this case, it announced that it will start operating in Miami, with plans to have fully autonomous, paid service available by 2026. 

Insurers: Welcome to the departure lounge. Our destination is the North Star of superior customer experience, typified by rising Net Promoter Scores, deepening brand loyalty and enhanced customer lifetime value.

If you have been with us so far, we previously described our North Star as the manifestation of "concierge" insurance service, a concept where agents form lasting customer relationships based on intimate knowledge of customer needs, leading to exceptional service at critical moments of truth, such as sales, underwriting and claims. We also discussed the technology pillars of AI, analytics and data management as the foundations for success.

Today, we will examine six guiding principles to follow along the way, each considered to accelerate progress and avoid missteps.

1. No need to digitize everything

We all know the way forward is not a paper trail, but a digital highway. However, it's easy to stumble in the race to digitize everything. Avoid this trap. First, rationalize your process. Insurance is a maze of structured and unstructured forms. Strive for straight-through processing. Identify where the bottlenecks are – claims processing, correspondence, manual tasks – then digitize those choke points. Focus on the front office, where customers come in contact, and let the back office catch up, if need be. You'll get best results when you streamline the areas where humans play a role first.

See also: How Cloud Tech Improves Customer Experiences

2. Leverage data analytics and AI for innovation

If you followed our advice on the importance of AI, analytics and data management, you will be in position to rapidly advance your agent interactions toward hyper personalization. To know your customer better, leverage data analytics and AI to avoid bias, spot trends and gain insights. Automate routine administrative tasks so your people can perform at their peak. Use your data smartly, to inform and justify your decisions. And ensure appropriate testing and governance to maintain an ethical stance.

3. Commit to a customer-first approach

According to Forbes, 86% of customers are willing to pay more for a great experience. Why not give it to them? Use your platform to enhance attention, trust and engagement. Simplify intake, especially in claims, where customers are already in a state of stress. Use technology to amplify human interactions, to inject empathy and to offer ancillary services in times of need (i.e., daycare, short-term rentals, alternate financing, etc.). Start with a minimum viable product, then test and learn as you go. Nothing will take you further faster than focusing on your customer.

4. Pay attention to shifting mindsets and culture

Evolving times call for adaptation and transformation. Be willing to embrace change from the top. Challenge the status quo as you consider modern customer needs. Give your people the tools they require to interact with a tech-savvy population. Take your cues from the insurtech movement. Disruption is on the way. Adopt a disruptive mindset.

5. Seek and keep quality partners

As the population ages, newer perspectives emerge. Are you building your talent base and peripheral resources around an ecosystem that's up for the challenge? True customer intimacy should be your main mission. Seek partnerships to promote a best-of-breed experience. Technology will only get you so far. You will need bright, innovative people to maintain the pace.

See also: 3 Steps for Insurers to Keep the Human Touch

6. Fearlessly fail forward

The future of insurance is no place for the complacent. You must make bold moves to avoid getting lost in the shuffle. Call your shots. Choose your openings. Then act. By balancing the present to architect the future, you will always have a base on which to improve. Remember, innovation comes from taking calculated risks. Don't let your past deter your vision for the future.

Keep these principles in mind as you streamline processes to eliminate routine tasks, amplify experience and enhance agent productivity. Expand your experience one step at a time, keeping your eyes fixed on your North Star. Leverage the expertise of wise partners, to avoid the pitfalls of doing it all yourself.

In our last article, we discussed the concept of "concierge" insurance. Just as in the hospitality industry, the concierge is the focal point for everything required to form a positive and lasting customer experience. In insurance, the best agents do this. They form a relationship with the customer, understand their needs, then over-deliver in the moments that matter.

The only problem is that getting to know a customer well enough to strike the right chord takes time. People are living longer, and insurance is a complex product. Without the help of technology, time alone would prevent agents from making inroads with customers.

The good news is technology exists to collapse the timeframe. Let's look at three foundational ingredients firms need to quickly get to the heart of customer needs and step beyond face value to create enduring value—the kind that only comes after forming deep, personal relationships.

See also: Digitization and Enablement of Agents

Ingredient #1: AI-Led Operations

The modern world has become a cosmos of clicks, swipes, likes and purchases, congealed into unique data fingerprints we all unconsciously carry with us wherever we go. You get married and have a kid, and suddenly, realtors, wealth managers and insurance agents have your number, ready to sell you something.

What makes this possible are the artificial intelligence capabilities many providers of goods and services have available to spot emerging opportunities. AI, and more recently, generative AI, has the ability to augment agent encounters for hyper-personalization; as AI monitors the data cosmos surrounding customers and prospects, it flags life events based on relevant data and serves up the useful information.

Generative AI, when modeled on quality data, can create fleshed-out customer narratives, manifested in ready-to-access formats, that accelerate agent reaction time and speed back-end processes from contact to close. Generative AI works for sales and underwriting, as well as it does for claims and collections. If firms build their operations around AI, they will be well on their way to creating super agents.

Ingredient #2: Automation and Robotics

If firms are going to compress the time it takes to get to know someone personally, it makes sense to compress the time it takes to service their needs efficiently. Automation and, to a growing extent, robotics, will help accomplish this goal. Integrating technology stacks for digitalized operations and knocking down silos that prevent one process from fluidly leading to the next are crucial steps.

Removing manual processes altogether is essential. People are the most valuable asset, and they should be free to engage in more important tasks than pushing paper from one stack to the next.

Digitalized operations have the power to strip costs, time and effort from every corner of an enterprise and set the stage for exceptional customer experiences. This is central to acquiring the modern architecture needed to turn a business into a welcoming respite for customer and employee alike.

Ingredient #3: Clean, Streamlined Data

The data cosmos mentioned above is truly more than any human, or group of humans, can handle in a given moment—those moments that matter in the life of an insurance customer. We are literally surrounded by data points, structured and unstructured, internal and external, proprietary and public, on platforms and applications, housed on-premises and off, in every corner of the organization.

According to a 2024 IBM survey of global insurance executives and their customers, 52% of executives cite inadequate, inaccessible, incomplete and otherwise unusable data as major constraints to swiftly meeting market demands. To overcome this, firms must modernize their data ecosystems to not only openly share data on demand but also support an AI-based analytics engine ready to sort the information and serve up accurate, relevant insights in real time.

We've all heard the adage, "data is the oil that runs the machine." If firms want to truly know their customers, they need clean, streamlined data fueling their customer analysis.

See also: Underwriters' Productivity Can Double

Moving Forward

Without a solid foundation, no house can stand. Without the core ingredients of AI, automation and data to stand on, super-agent, "concierge" insurance can't happen.

Next up, we'll examine six principles to bear in mind as firms transform for over-the-top customer service.

Claim reviews are an essential task in the world of property and casualty insurance. However, in an era marked by rapidly evolving risks and advancing technologies, the claim review process has not evolved much over time. Most claim reviews today bear a striking resemblance to those conducted in the 1990s or even the 1980s.

Before a single review takes place, the claims professional has much to do, including a line-by-line audit of each claim in the client's caseload. This labor-intensive process creates capacity constraints on adjusters, who already have an assigned caseload with claims to investigate, evaluate and resolve. The preparation for these claim reviews can take many hours and even days. It is typical for an experienced adjuster to prepare for and attend multiple claim reviews each month. It is common for brokers, MGAs, policyholders, self-insureds and carriers to request monthly, quarterly, annual and even some ad hoc claim reviews.

The insurers want to stay informed on new claims, pending claims, reopened claims, claim financials, emerging risks, litigation involvement and any other insights into their risks/book of business and obtain a deeper understanding about the cause of loss on the individual claims. Each claim is discussed in detail to assess if the claim is compensable, if the insured has committed negligence, if there is the potential for a nuclear verdict or if there is an affirmative defense in that venue. The alleged injuries/damages of the claim are reviewed along with the claim timeline to develop an agreed-upon approach to resolve the claim in good faith. For many years, the burden of preparing for the claim reviews has rested primarily with the claims professionals. Claim reviews are and will remain part of the claims ecosystem.

See also: AI's Role in Modern Claims Management

Is There a Better Way?

Yes, artificial intelligence can dramatically improve and speed up the process of claim review preparation. Claims organizations can benefit from AI by choosing tools designed to remove friction and simplify processes.

While general-purpose AI tools like ChatGPT, Gemini or even earlier versions of Siri have gained widespread recognition, finding the right fit for your industry and profession is essential. Many of today's more advanced AI tools are not trained on insurance claims data, nor are they designed to generate intelligence that would be helpful in a claim review.

Document Intelligence for the Modern Claim Review

Advanced document intelligence tools are revolutionizing the claim review process. These cutting-edge solutions augment the traditional approach by visually organizing and presenting comprehensive claim summaries, risk trends and insights, claim financials and treatment timelines with both the structured claim data and claim documents. The goal of document intelligence is to provide a tailored, trained knowledge base, which is then used to inform the claims professional and augment manual tasks like claim reviews.

Using document intelligence to understand claims documents is helpful, but is it what you really need? The most effective solutions are those trained specifically on claims data, enabling them to provide nuanced insights and support that align closely with the needs of insurance professionals. The ideal tool is one trained in claims data that synthesizes the art (decision-making) and science (data) of what you do. This combination of specialized knowledge and advanced analytics capabilities creates a powerful tool that enhances human expertise rather than attempting to replace it. That's what we call augmented intelligence.

As first published in Insurance Innovation Reporter.