What today’s customers really want and how to deliver
Insurance is no longer just about protection. It is about relevance, value, and trust. Today’s customers are savvy and expect more than a policy. They expect offerings that respond to their needs in real time, and deliver a seamless, transparent experience. While expectations are rising, many carriers continue to rely on rigid product structures, outdated engagement models, and one-size-fits-all approaches. The result is missed growth potential and eroding customer loyalty.
Insurance carriers are in a position of clear opportunity. With the right strategy, they can move beyond incremental improvements and redefine what value looks like for today’s customer. Carriers who redesign their products with precision will gain a meaningful advantage. Whether through personalization, embedded offerings, or sustainable product innovation, the future belongs to insurers who view product development not as a technical enhancement, but as a core driver of growth and differentiation.
Modern customers expect seamless experiences across all their financial interactions, including insurance. The rise of digital-first engagement, on-demand services, and a greater focus on financial well-being is shaping new expectations. Insurance customers are now looking for:
- Customization: Policies tailored to their lifestyle, risks, and financial goals.
- Transparency: Clear, easy-to-understand coverage details.
- Flexibility: The ability to modify policies as their circumstances change.
- Digital Accessibility: The convenience of purchasing, managing, and claiming policies online.
According to a Liferay DXP study, 88% of consumers desire more personalized insurance products, yet 21% feel that providers do not tailor their customer experiences at all. Additionally, a report from The Agent Support Network of America (ASNOA) states that nearly 50% of policyholders are willing to switch providers for a more personalized experience.
The implication is clear: there's a massive opportunity to differentiate by designing around what real people actually want, but it requires insurers to better segment their customer base, define unmet needs, and build targeted, value-driven propositions.
The following strategies offer a clear path for insurers to modernize their offerings, deliver greater customer value, and unlock new avenues for growth.
Five key strategies for redefining insurance products
1. Personalization through AI and big data
Advancements in artificial intelligence (AI) and data analytics enable insurers to offer highly personalized coverage. By analyzing customer behavior, purchasing habits, and risk profiles, insurers can design policies that align with individual needs. Usage-based insurance (UBI), where premiums are determined by real-time data (e.g., driving habits for auto insurance), is an example of this shift. According to Allied Market research, the UBI market is projected to grow from $43.38 billion in 2023 to $70.46 billion by 2030.
But personalization extends beyond pricing. Tools like customer intelligence platforms allow insurers to identify visitor intent, serve custom digital experiences, and surface relevant products, all in real time. The challenge is prioritizing where to personalize, balancing privacy and trust, and integrating these tools into legacy systems. The insurers who crack this will see not just better conversion rates, but deeper engagement and higher lifetime value.
2. Modular and flexible coverage
Most insurance customers do not fully understand the complexities of insurance products, and the overwhelming buying process often discourages them from purchasing a policy. A lack of differentiated or easy-to-understand coverage options may push potential customers to a competitor.
In response, insurers must embrace flexible product design, leveraging models like “good, better, best” or more modular coverage structures that simplify the buying experience. These structures give customers control over both coverage and price and empowers them to build what feels right for their situation. But success here means more than just offering flexibility; it means getting clarity on key customer segments, understanding what matters most to them, and architecting product structures and journeys that support intuitive decision-making. Getting this right builds loyalty. Getting it wrong adds noise and reduces carrier conversion rates.
3. Embedded insurance
The future of insurance isn’t a separate purchase; it’s embedded seamlessly into everyday transactions. Embedded insurance allows customers to purchase coverage as part of a broader experience, such as buying a car, checking out online, or securing a loan. While travel insurance has been a traditional use case, we’re now seeing meaningful traction in areas like automotive and e-commerce, where real-time coverage is integrated at the point of need.
A report from GlobeNewswire estimates that embedded insurance will drive over $5 trillion in gross written premiums by 2030. But seizing this opportunity isn't just about plugging into a new distribution channel. It requires clarity on which partners make strategic sense, which products fit each context, and how to deliver seamless, intuitive customer experiences. Insurers must also evaluate the economics of embedded models, the impact on existing agent channels, and their ability to scale across use cases. The right strategy could mean outsized growth; the wrong one could dilute the brand or customer value.
4. On-Demand and microinsurance
On-demand insurance lets customers activate and deactivate coverage as needed. This model is ideal for gig economy workers, freelancers, and those engaging in short-term activities. Similarly, microinsurance provides low-cost, targeted coverage for underserved populations, helping to bridge the financial protection gap. The World Bank reports that microinsurance adoption is growing at a staggering 20% annually.
The appeal is clear: reach new customer segments with targeted, cost-effective solutions. But the execution challenge is easier said than done and identifying the right moments to offer these products, building the tech to support activation/deactivation, and navigating regulatory frameworks, can be difficult. Insurers that treat these as test-and-learn opportunities, while aligning to clear growth goals, will be best positioned to lead.
5. Sustainability and ESG-focused insurance
Sustainability is an increasingly important factor for customers. A Swiss Re report found that 75% of consumers are willing to pay more for insurance products that support environmental and social initiatives.
Insurers must respond—not just to align with values, but to unlock a differentiated position in the market. The opportunity is to reward sustainable behaviors (like EV adoption), offer ESG-compliant commercial products, and partner with purpose-driven businesses. Yet few insurers have figured out how to build products that authentically reflect ESG principles while also aligning to profitable growth. The real question isn’t whether to play in ESG, but how to build a strategy that’s credible, clear, and commercially viable.
Insurers: lead through innovation, unlock growth, and deliver truly customer-centric strategies
With customer expectations changing fast and their demand for more innovation, Insurers who embrace technology, flexibility, and transparency will build stronger relationships with their customers and stay competitive. Moving forward, success will come from creating solutions that focus on the customer while also supporting growth. To thrive, insurers need to adapt, prioritize the right segments, and keep up with digital trends. The companies that take bold, strategic steps will lead the way.
At Simon-Kucher, we help insurers seize high-impact opportunities and build strategies that translate change into competitive advantage.
