Samantha Chow

The life insurance industry is facing a relevance challenge. While consumers recognise the importance of financial protection, many struggle to see how life insurance fits into their lives, preventing insurers from building lasting customer relationships.

The World Life Insurance Report 2027, researched jointly by the Capgemini Research Institute and LIMRA, finds that 47% of consumers say they are considering purchasing a life insurance policy, yet more than 40% of those feel confused, uncertain, or unconvinced with the information they find. As a result, one in four drop out of the purchase journey before completion.

The report, which surveyed more than 6,100 consumers worldwide, discovered that younger people are especially prone to this pattern. While 54% of 18-to-40-year-olds consider buying life insurance, they are also more likely to abandon the process (28%) before completing it. Overly technical language (37%), affordability concerns (35%), and a perceived lack of relevance to life stage (25%) rank as some of the most common reasons people walk away altogether.

Consumers embrace AI tools, but still lean on human guidance

While more than half (51%) of consumers plan to use generative AI tools to research and compare life insurance products, human guidance continues to play a pivotal role in decision-making. Two-thirds of consumers prefer working with a human advisor when finalising coverage decisions, and 85% want advisor interaction at some point during their journey, whether to validate research, answer questions, or provide reassurance.

Consumers increasingly expect advisors to understand their circumstances and experiences. Half of respondents say they prefer working with advisors who share similar demographic characteristics, believing they are better equipped to relate to their needs and life situations. However, fewer than a quarter of insurers can match advisors in this way.

“Consumers have high standards for their personal financial services products. When it comes to life insurance, they recognise its importance, but complexity at the point of purchase and post-sale silence undermine policy ownership – putting customer relationships at risk and triggering exits that cost the industry billions,” said Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini. “Best-in-class insurers demonstrate what’s possible when consumers sit at the heart of every decision. They build the data foundations to turn customer intelligence into proactive, lifelong engagement that has a real commercial impact. The top 10% are orchestrating an ecosystem of advisors, partners, and AI-enabled channels to create a consistent journey between automated and human touchpoints.”

Coverage without ongoing engagement leaves policyholders in the dark

The report finds that many life insurers lose momentum once a policy is issued. Nearly 40% of policyholders say they rarely hear from their life insurer after purchase. At the same time, half of consumers who discontinue policies do so within the first three years, before insurers have an opportunity to build durable, long-term relationships.  Notably, 48% say they’d be more likely to stick with an insurer that offers proactive guidance before, during, and after their purchase.

Group life insurance, which is usually purchased through an employer, follows a similar pattern. Guidance tends to focus squarely on logistics and transactional matters with only 25% of people sharing that they receive support in finding coverage that fits their needs. The report also reveals that more than half (57%) of employees feel generally confident in their employer-provided coverage but admit to never formally assessing or validating whether it suits their needs, leaving them at risk of insufficient protection and a false sense of security.

“Our research shows affordability is often a perception problem – consumers believe life insurance costs far more than it does –  and that makes education the industry’s biggest opportunity. We need to bring consumers into the fold and guide them through the entire process, keeping it simple, embracing tools like AI, but never losing sight of how essential human advisors are. When insurers nurture the relationship with ongoing support, consumers respond,” said Bryan Hodgens, Senior Vice President and Head of LIMRA Research.

A small group of leading insurers are pulling ahead

The report finds only 18% of insurers have a unified strategy and customer journey roadmap, underscoring the need for a plan to address those relevancy gaps. Best-in-class insurers[i], representing only 10% of all carriers, have set a clear standard of how life insurance is designed, communicated, and delivered at scale. They distinguish themselves against mainstream peers by:

• Transforming consumer engagement: Best-in-class insurers are nearly twice as likely to tailor advice to a consumer’s life stages, communicate in plain language and proactively engage around key life milestones. They use short-form content and relatable stories and AI-based conversational guidance to resolve queries.
• Evolving the advisor workforce: High performing insurers are modernising advisor experiences by improving compensation structures, automating workflows, and equipping them with real-time insights. These insurers are more than twice as likely to match consumers to advisors based on age, gender, language and cultural background.
• Building intelligence through enhanced data foundations: Best-in-class insurers are almost three times more likely to unify consumer data into a single view and deploy agentic AI capabilities that execute tasks autonomously.

The payoffs are measurable: best-in-class insurers achieved 41% higher revenue growth over the past three years and 12% lower lapse rates than mainstream peers. For an industry searching for ways to convert consumer interest into lasting relationships, these results demonstrate that a high-functioning model exists among the industry’s top performers.

Read the report.

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Samantha Chow

The Capgemini Research Institute’s World Life Insurance Report 2025, published yesterday, reveals that the life insurance industry is struggling to meet today’s customer experience expectations, with legacy technology being a major barrier to driving meaningful change.

However, the report identifies a small group of life insurers globally delivering quantifiably outstanding customer experience to achieve ‘best-in-class’ status. In comparison to mainstream insurers, these innovative companies have been rewarded with a 38% higher Net Promoter Score (NPS^®), an 11% lower expense ratio, and a 6% higher revenue growth than the rest of the industry in the last three years.

Faced with high inflation, economic uncertainty, and waning interest, life insurers are at a critical juncture as the industry confronts a 33% fall in penetration in mature markets^[1] between 2007 and 2023^[2], with one-in-two policyholders saying their experience is underwhelming. Much of this dissatisfaction permeates through the entire customer journey, particularly across product offerings, onboarding, servicing and claims/surrenders.

Insurers face challenges at every stage of the customer journey

At the onboarding stage, one-in-three (35%) retail policyholders struggle with complex terms and 27% don’t like the lengthy application process. After purchasing a policy, one-in-four (25%) retail and group customers express frustration due to long wait times, while 23% are frustrated by the inability to access self-service options for policy changes. The claims process also poses challenges, primarily due to a lack of digitization: one-third (35%) of retail policyholders say they face a complicated claim application process, with 27% noting a lack of empathy during the claims experience.

The research shows that younger policyholders (between 18-40 years) are more frustrated by a challenging experience than older customers (between 41-60 years) throughout their insurance journey. This includes slow and complex onboarding processes, lack of dedicated communication channels, and an inability to self-service policies. They also demand greater claims flexibility, with 42% citing inflexible payouts as a critical concern, versus only 26% of older customers.

Despite a desire to redesign the onboarding, service and claims experience, only 9% of carriers have established ecosystem-wide processes that capture data from multiple sources to create a unique view of customers, and in turn, deliver personalised experiences through policyholders’ preferred channels.

“Life insurance is shifting from a must-have to a maybe proposition. Carriers must shake off the perception that life insurance is just ‘death insurance’. They can achieve this by focusing on engaging the next generation of policyholders, moving beyond a product-driven approach to put the customer at the centre of their strategies,” said Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini. “Many insurers are struggling with legacy technology or investments that have failed to deliver the target returns. The path forward is a customer-centric transformation that draws inspiration from the best-in-class by embedding AI-augmented, human-touch service into core processes.”

Efforts to improve customer experience have stalled for most carriers

Insurers recognize an urgent need to modernize their operations, however, only 41% met or exceeded their latest transformation goals. Past transformation initiatives fell short of delivering the intended results as insurers prioritized multiple goals which hindered their efforts. The challenges were further complicated by unexpected integration complexities (50%), lack of alignment with business objectives (42%) and insufficient skilled resources (42%).

Despite these headwinds, the report finds an elite group of 5% of best-in-class insurers who are delivering a superior customer experience. These best-in-class carriers lean into the latest technologies, like generative AI, to offer exceptional onboarding, self-service, and claims capabilities.

The best-in-class stand out against their counterparts:

• 78% of best-in-class insurers have automated underwriting compared to 15% of mainstream insurers to optimise onboarding efforts.
• 78% offer policyholders self-service portals compared to only 13% of mainstream carriers.
• 56% provide a seamless and intelligent claims experience through AI assistance for voice and sentiment analysis versus only 3% of mainstream insurers.

Generative AI can be a catalyst, although talent gaps remain a hurdle

While the transformative potential of generative AI is undeniable for the life insurance industry, it brings to light a pressing talent challenge. Today, 67% of best-in-class insurers are technically ready to leverage and maximise generative AI’s capabilities across their operations, with readiness levels dropping to 25% for mainstream insurers. Generative AI, when augmented with human intelligence, can revolutionize the consumer experience, while simultaneously driving operational efficiencies. However, one-in-three executives (34%) highlight identifying talent as a significant obstacle hindering their ability, with critical gaps in roles such as behavioral scientists, experience designers, and AI prompt engineers.

According to the report, success will hinge not only on the implementation of the technology, but also on insurers’ ability to attract, develop, and retain the right talent. Carriers who can effectively blend cutting-edge technology with skilled professionals will be well-positioned to lead the industry into a new era of innovation and customer-centricity.

Report Methodology

The World Life Insurance Report 2025 draws data from two primary sources: the Global Voice of the Customer Survey, administered during May and June 2024, and the Global Insurance Executive Survey, conducted during May and June 2024. This primary research covers insights from 20 markets: Australia, Belgium, Brazil, Canada, Finland, France, Germany, Hong Kong, India, Italy, Japan, Mexico, the Netherlands, Norway, Portugal, Singapore, Spain, Sweden, the United Kingdom, and the United States. First, our comprehensive Voice of the Customer Survey, administered in collaboration with Phronesis Partners, polled 6,186 life insurance customers in 18 countries. These markets represent all three regions of the globe – the Americas (The United States, Mexico, Canada, and Brazil), Europe (Belgium, France, Germany, Italy, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom), and Asia-Pacific (Australia, Hong Kong, India, Japan, and Singapore). Second, the report also includes insights from interviews with 213 leading life insurance company executives across 16 markets. These markets together represent all three regions of the globe – the Americas (The United States, Canada, and Brazil), Europe (Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Spain, and the United Kingdom) and Asia-Pacific (Australia, Hong Kong, India, and Singapore).

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Notes:
[1] Mature markets: North America includes Canada and the United States. Western Europe includes Portugal, Luxembourg, Italy, Netherlands, Germany, Belgium, Austria, France, Greece, Malta, Finland, Spain, Switzerland, Denmark, Sweden, Norway, and Cyprus. APAC includes Australia, New Zealand, Japan, Hong Kong, Singapore, South Korea, and Taiwan.
[2] Swiss Re – sigma explorer

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