More than six in 10 insurance customers are likely to abandon an interaction if submitting information becomes too difficult, according to new research from Smart Communications, highlighting the commercial cost of poor digital customer experiences. 

The 2026 Customer Experience in Insurance Benchmark Report, based on responses from thousands of consumers across global markets, suggests insurers are still falling short of customer expectations despite ongoing investment in digital transformation. The research identifies four areas where insurers have the greatest opportunity to improve customer experience: using artificial intelligence responsibly, modernising digital data collection, improving customer communications and reducing friction across customer interactions. 

AI needs to build trust

Artificial intelligence remains a key focus for insurers, but customers are signalling they want greater transparency around how it is being used.

The report found 85% of consumers consider it important that insurers disclose when AI is involved in customer interactions. While many see value in AI delivering faster service, greater accuracy and more personalised experiences, confidence in the technology handling personal information securely has softened, with many respondents still expecting human oversight for important decisions. 

“Customers value transparency above all when communicating with their insurer. As businesses are adopting AI into their processes, it is easy for consumers to lose trust if they feel like they are communicating with a robot rather than a human. The number of customers who will leave a business due to bad communications has increased to over 70% in the past year, solidifying the need for businesses to prioritise clear, transparent communications or risk losing out to their competitors,” says Aaron Everingham, director of insurance at Smart Communications, Australia. 

Simpler processes drive better outcomes

The report found customers increasingly expect digital interactions to be straightforward, whether they’re lodging a claim, updating policy information or submitting supporting documentation.

Long forms, repeated requests for the same information and manual processes continue to frustrate customers, while secure, intuitive digital experiences are now seen as an expectation rather than a point of difference. The research also found customers who experience simple digital interactions are more likely to remain loyal, recommend their insurer and purchase additional products. 

Communications remain under pressure

Customer communications also emerged as an area requiring attention.

Satisfaction with insurer communications declined compared with the previous year, despite respondents placing increasing importance on receiving timely, relevant and personalised information. The findings suggest communication continues to play a central role in shaping trust, particularly during claims and policy servicing. 

Connected experiences still missing

The report’s final theme centres on reducing friction across customer interactions.

Consumers increasingly expect information to move seamlessly between websites, mobile apps, email and contact centres without having to repeat information or restart processes. However, many respondents said disconnected systems continue to make interactions more difficult than they should be, highlighting the need for insurers to better connect digital channels and back-end systems. 

“The customer experience can make or break consumer confidence. Investing in technology that allows customer information to carry seamlessly across every interaction, from the first quote to policy updates and renewal notices, will transform the way consumers view insurers. Insurers should also ensure their systems make it easier for customers to access information and manage their policies through the channel of their choice. Getting these foundations right will not only create a more seamless customer experience but could also become a key competitive differentiator for insurers,” Mr Everingham says.

While the report identifies several areas for improvement, it concludes insurers have an opportunity to strengthen customer loyalty by making digital interactions easier, improving communications and using technology in ways that build customer confidence rather than adding complexity. 

The 2026 Customer Experience in Insurance Benchmark Report, published by Smart Communications, includes detailed benchmarking across regions and generations, together with practical recommendations for insurers looking to improve customer engagement and digital service delivery.

The full report can be accessed here.