Industry
Insurance
Reinventing the Insurance Industry with a Digital-first Strategy
Highlights
- Digital progress hasn’t reduced customer effort in the European insurance industry—despite heavy digital investments, European insurers continue to see rising complaints, revealing a structural gap between how journeys are designed and how customers experience them.
- Key issues stem from emotional and behavioural blind spots, ageing demographics, reactive complaint management, and legacy operating models, increasing cost-to-serve, regulatory scrutiny, and churn risk.
- European insurers must adopt a human+AI approach to customer experience (CX) management. By embedding behavioural intelligence into customer processes, insurers can reduce friction, improve trust, and convert CX into a pillar of sustainable growth.
CX in Europe: Current state
Customer experience in Europe’s insurance sector is entering a decisive phase with insurers investing heavily in digital platforms, automation, and self-service channels.
However, rising complaint volumes across multiple European jurisdictions suggest that digitalisation alone has not resolved underlying customer friction.
Customer experience in European insurance reflects a paradox. Digital access has expanded, but perceived effort has not correspondingly declined. Customers increasingly begin their journey online: researching policies, comparing premiums, and submitting information digitally. However, when process complexity related to medical disclosures, coverage exclusions, underwriting clarifications, or premium adjustments arises, many customers transition to voice channels. In doing so, they frequently encounter duplication of effort, fragmented information flows, and inconsistent explanations. These barriers are not merely anecdotal—complaints data across European markets corroborates this pattern.
- A Financial Services and Pensions Ombudsman report reveals that in Ireland, insurance complaints increased by approximately 18% in 2025 compared to 2024 with motor insurance accounting for the largest number.1
- The UK’s Financial Conduct Authority (FCA) reported 764,254 complaints in insurance and pure protection in 2024 H1, up from 754,010 in 2023 H2.2
- A European Insurance and Occupational Pensions Authority (EIOPA) report reveals that 17% of consumers who made a claim in the last two years are dissatisfied with claims handling—causes cited included lower payout amounts (23%), lengthy process (22%), wrongful denial (16%). In the non-life segment, claims handling accounted for the highest number of complaints at 52% of total complaints handled by insurers in 2024.3
Even as they grapple with the increasing volume of complaints, insurers face growing regulatory scrutiny and a demographic transition that will further reset customer expectations—by 2050, more than 28 per cent of Europe’s population will be aged 65 or above.4 This convergence of complaints, intense regulatory oversight, and demographic change signals a structural gap between how insurers design journeys and how customers experience them. The next phase of transformation must therefore move beyond digital enablement. It must embed behavioural understanding and emotional awareness into experience design. The way forward for European insurers is to adopt a human+AI approach that strengthens trust, improves clarity in customer interactions, reduces complaints and meets regulatory expectations while maintaining operational efficiency.
Evaluating the CX gaps
In Europe, complaints are treated as signals of poor conduct.
Elevated complaint volumes can influence supervisory focus and reputational perception. They are not just operational metrics but indicators of structural stress. The regulatory context compounds the challenge—European insurers operate within frameworks shaped by Solvency II, conduct supervision regimes, and data protection requirements. These frameworks demand transparency, fairness, and clear communication. Yet, the way compliance requirements are operationalised can increase process complexity, lengthen customer disclosures, and intensify the burden of document review for customers in turn exacerbating overall cognitive load.
At the same time, demographic realities are shifting. The European population is ageing steadily. Older customers may be digitally active, but their expectations are often centred on clarity, reassurance, and simplicity rather than speed. Digital-first strategies that prioritise efficiency can inadvertently sideline these expectations. The result is a conflict between efficiency-driven design and experience-driven expectations. Beyond customer dissatisfaction with service quality, this tension has strategic implications, affecting cost structures, regulatory confidence, and long-term profitability. When journeys generate confusion, operational costs rise through repeat contacts, escalations, and manual interventions. When explanations lack clarity, complaints increase and supervisory scrutiny intensifies. Over time, these patterns influence brand perception and loyalty. In competitive European markets where switching barriers are relatively low, high customer effort becomes a commercial risk with the potential for churn.
In our view, addressing the CX conundrum requires a structural diagnosis rather than incremental optimisation. Let us examine the structural gaps that negatively impact CX.
Most digital journeys are designed to focus on process completion rather than human behaviour. They track inputs but rarely interpret hesitation, uncertainty, or emotional tone. Insurance, by its nature, involves moments of vulnerability such as bereavement, illness, or financial uncertainty. When journeys remain purely transactional during such moments, dissatisfaction increases.
Many insurers continue to operate with partially integrated legacy systems. Front-end digital layers may not fully synchronise with core policy administration systems. This leads to repetitive data entry, inconsistent information across channels, and extended resolution times. From a business perspective, fragmentation increases cost-to-serve and operational risk.
Complaint management is reactive in many insurance firms. While escalation processes are robust, predictive identification of confusion points is underdeveloped. Data generated through complaints and service queries is often analysed retrospectively. Insights on gaps or breaks that result in complaints are not taken into consideration while designing digital journeys.
Regulation rightly prioritises customer protection. However, compliance requirements can translate into longer disclosures, additional consent requirements, and layered documentation. Without careful design, transparency can become verbosity, and clarity can give way to overload.
There is also an internal cultural dimension. Insurers typically measure success by speed of digital deployment rather than depth of customer understanding. This can lead to technology-led solutions that optimise processes but overlook emotional context. As supervisory bodies across Europe increasingly focus on customer outcomes rather than procedural compliance alone, insurers must ensure that experience design aligns with both regulatory intent and human expectations. This requires moving from checklist-based transparency to clarity-based communication.
Digital transformation has not eliminated disparities in digital literacy. As Europe’s population ages, the diversity of comfort levels with digital tools increases. Simplification, not additional functionality, becomes the primary design imperative.
Collectively, these gaps reveal that the CX challenge is not rooted in insufficient technology but a lack of complete alignment between operating models and human realities.
Toward CX that delights
The first wave of transformation focused on digitisation.
The next one must focus on behavioural design. Digitisation reduces manual intervention. Behavioural design reduces cognitive effort. The distinction is subtle but critical. A human+AI model (see Figure 1) can serve as a strategic enabler of this shift. Rather than automating more tasks indiscriminately, it enables digital offerings to respond intelligently to behavioural signals and contextual factors.
Figure 2: Building cyber resilience using accelerated computing
Static onboarding forms can evolve into adaptive pathways that adjust based on customer pace and interaction patterns. Where hesitation occurs, explanatory prompts can appear. Where confidence is demonstrated, redundant steps can be removed. This approach reduces abandonment and increases clarity by providing explanations at the exact points where customers typically hesitate, misunderstand, or are unable to understand requirements.
An analysis of the reasons for complaints and frequently asked questions can help insurers identify where misunderstandings most often occur. Proactively embedding simple explanations at these pain points helps customers better understand policy terms and processes, reducing confusion while also supporting regulatory transparency.
Routing models can incorporate not only subject categorisation but contextual indicators of urgency or vulnerability. Claims related to bereavement or health events can be prioritised appropriately, improving both experience and resolution efficiency.
Routine interactions such as premium confirmations, beneficiary updates, and document uploads can be streamlined into minimal-action workflows—insurers must operationalise these ‘silently’ in the background, without requiring customers to follow up or put in effort. Reducing micro-friction improves overall perception of ease.
Frontline advisors can be supported by real-time summarisation tools that consolidate policy details and anticipate likely customer concerns. This improves consistency, reduces handling time, and strengthens communication clarity. Crucially, a human+AI approach does not replace human interaction but enhances the human interface by making it more informed and responsive.
For European insurers, quick action to reduce CX friction is crucial. Reducing confusion, especially for older customers who find digital navigation a challenge, lowers repeat contact rates, remediation effort, and complaint escalation volumes, directly influencing operational cost. Clearer communication strengthens retention and cross-sell potential. By embedding transparency directly into journeys, insurers demonstrate alignment with regulatory expectations around conduct and healthy customer outcomes. Inclusive and behaviour-aware CX design that accommodates varying digital confidence levels and facilitates measurable improvements in customer outcomes is critical to gaining trust and promoting the long-term credibility of insurers.
Clearly, embedding inclusivity and behavioural intelligence into CX design carries tangible implications for European insurers: sustained relevance, the ability to deliver experiences that delight, and customer loyalty and retention. To convert this vision into reality, insurers must:
- Capture data across customer journeys, complaints, contact centre interactions, and digital behaviour.
- Apply behavioural analytics to identify hesitation patterns, vulnerability indicators, and voice-of-customer insights.
- Diagnose complaint drivers and friction by analysing high-effort interactions, misunderstandings, and repeat contacts.
- Prioritise journeys with the highest customer impact, regulatory risk, or operational cost.
- Introduce AI-enabled experience orchestration, including adaptive onboarding, proactive support, intent-aware service routing, automation of routine tasks, and AI-guided advisory.
- Equip frontline advisors with tools to improve clarity, consistency, and resolution quality.
- Strengthen cross-functional collaboration between digital, operations, risk, and compliance teams to redesign journeys holistically.
- Monitor customer outcomes, complaint trends, and regulatory indicators to continuously improve experience.
The way forward
Over the next decade, the European insurance landscape will witness an intersection of customer experience, capital allocation, conduct governance, and strategic planning.
Boards will be required to demonstrate how customer outcomes are monitored and improved. Embedding behavioural intelligence into operating models enables insurers to move from reactive remediation to preventive design. In doing so, CX management becomes not just a customer initiative but a structural pillar of sustainable growth.
As regulations tighten and demographics shift, trust will define competitive positioning. The direction is clear: build experiences that feel simpler, more transparent, and more human. Insurers that act quickly to embed behavioural intelligence into their operating models will not merely reduce complaints but redefine what trustworthy insurance feels like in a regulated, ageing Europe.
References
1 Financial Services and Pensions Ombudsman, Overview of Complaints 2025, April 2026, Retrieved April 2026, https://fspo.ie/documents/Overview-of-Complaints-2025.pdf
2 Financial Conduct Authority, Aggregate complaints data: 2024 H1, October 2024, Retrieved April 2026, https://www.fca.org.uk/data/aggregate-complaints-data-2024-h1
3 European Insurance and Occupational Pensions Authority, Consumer Trends in Insurance and Pensions 2025: Heatmap with Key Findings, December 2025, Retrieved April 2026, https://www.eiopa.europa.eu/document/download/dc1352d3-2787-44aa-8fce-c328b749c323_en?filename=EIOPA-BoS-%2025-621-%20Heatmap2.pdf
4 Eurostat, Population structure and ageing, February 2026, Retrieved April 2026, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Population_structure_and_ageing