A new and extensive report from the Capgemini Research Institute says the life insurance industry is struggling to meet customer experience expectations, with legacy technology being a major barrier to meaningful change.  

The World Life Insurance Report 2025 found, however, that best-in-class life insurers who deliver quantifiably outstanding customer experience enjoy 38 per cent higher Net Promoter Scores (NPSs) than their mainstream counterparts, an 11 per cent lower expense ratio on average and six per cent higher revenue growth than the rest of the industry in the past three years. They add that 67 per cent are ready to leverage generative artificial intelligence (AI) to innovate the policyholder experience and optimize operations.  

The report advocates for insurers to craft intelligent policyholder journeys, promote policyholders’ financial wellness, reimagine the customer experience, leverage generative AI and simplify and modernize IT architecture. 

“Life insurers are at a critical juncture as the industry confronts a 33 per cent fall in penetration in mature market between 2007 and 2023, with one-in-two policyholders saying their experience is underwhelming,” they write.  

The report is based on the research institute’s Global Voice of the Consumer Survey – a survey of 6,186 life insurance customers in 18 countries, conducted in May and June of 2024 – coupled with information from the Global Insurance Executive Survey, a poll of 213 leading life insurance industry executives in 16 markets, including Canada, during the same period.  

It further finds that this dissatisfaction extends to every stage of the customer journey: 35 per cent struggle with complex terms, 25 per cent express frustration with long wait times, 23 per cent are frustrated by a lack of self-service options, 35 per cent say the claims process is complicated and 27 per cent noted a lack of empathy during the claims experience. 

Among the insurers Capgemini has identified as being best-in-class, they say 78 per cent have automated underwriting, compared to just 15 per cent of the mainstream insurers surveyed; 78 per cent offer policyholder’s self-service, compared to 13 per cent of mainstream carriers and 56 per cent offer an intelligent claims experience, augmented by AI assistance for voice and sentiment analysis. This is compared to only three per cent of the mainstream carriers able to do the same.  

That said, the report, Bridge the customer experience divide: Ensure life insurance relevancy through relentless customer centricity, adds that talent gaps remain a hurdle. “Today, 67 per cent of best-in-class insurers are technically ready to leverage and maximize generative AI’s capabilities across their operations, with readiness levels dropping to 25 per cent for mainstream insurers,” they state. “However, one-in-three executives (34 per cent) highlight identifying talent as a significant obstacle.” Critical roles going unfilled include those for behavioural scientists, experience designers and AI prompt engineers. 

“Against high inflation and macroeconomic uncertainty, today’s customers are only mildly interested in traditional life insurance products. Rising interest rates benefitted insurers’ recent financial performance, but short-term gains cannot conceal the longer-term impact of sluggish growth,” they warn.