Insurance Is a Promise. What Happens When the Customer Needs You to Keep It?

Insurance asks customers to make an unusual kind of purchase. They pay for something they hope they will never need, often without knowing exactly when—or whether—they will experience its full value. What they are really purchasing is a promise: if something goes wrong, the protection they paid for will be there when they need it.

That makes trust fundamental to the insurance business. Swiss Re has identified declining trust in institutions, including insurers, as a structural risk for the industry. Its research notes that more than 80% of commercial insurance buyers consider trust important when deciding whether to insure their business, yet surveys cited by Swiss Re have found that fewer than two-thirds of consumers trust insurers. Even more concerning, only about half trust insurers to pay claims resulting from natural catastrophes.

For insurers, the business question is bigger than whether customers understand a policy or are satisfied with a transaction. It is whether the organization consistently delivers the value behind the promise it sold.

Customers Aren’t Really Buying a Policy

Insurance companies naturally think in terms of products: homeowners, auto, life, commercial coverage, benefits, deductibles, limits, endorsements and premiums. Customers tend to experience insurance differently.

PwC makes an important distinction in its research on insurance customer experience. Most customers would prefer not to buy insurance at all. What they actually want is to feel financially secure and confident that they can continue pursuing their personal or business goals even when something unexpected happens.

That distinction changes the value proposition.

A customer purchasing homeowners insurance isn’t primarily trying to own another financial product. They’re trying to know that a fire, hurricane, theft, liability claim or other unexpected event won’t financially destroy what they’ve built. A business owner purchasing commercial insurance isn’t excited about acquiring a policy. They’re trying to protect the company they’ve spent years building.

The policy is the mechanism. Security is the value.

When insurers understand that difference, customer experience becomes more than making transactions convenient. It becomes an opportunity to reinforce the reason the relationship exists in the first place.

Trust Is Built Before the Claim

It would be easy to assume that customers decide whether they trust an insurer when they file a claim. In reality, trust is being built—or weakened—throughout the relationship.

Policy language matters. Billing matters. Rate changes matter. The quality of advice matters. Whether customers understand what they’re purchasing matters. And when something changes, the way the insurer communicates that change can influence how customers perceive the organization.

Research discussed by the Casualty Actuarial Society illustrates how powerful that understanding can be. Citing J.D. Power findings, CAS reports that 90% of auto insurance customers with high levels of trust say they are likely to renew with their insurer, compared with just 30% of customers in the low-trust category. The research also suggests that customers who fully understand and expect an insurer-initiated rate increase can maintain trust levels comparable to customers whose rates actually decreased.

That challenges a common assumption about customer loyalty. Customers don’t necessarily need every outcome to work in their favor. They need to understand what is happening, believe the organization is communicating honestly, and feel they are being treated fairly.

Transparency doesn’t guarantee that customers will like every decision. It can help them trust the organization making it.

The Claim Is Where the Promise Becomes Real

Then comes the moment that distinguishes insurance from many other products: the customer actually needs it.

A claim often happens during an already difficult experience. A customer may have been in an accident, lost property, experienced damage to a home, faced a health issue, or watched something disrupt their business. At that moment, the insurance relationship stops being theoretical.

The promise is being tested.

The Casualty Actuarial Society cites J.D. Power research indicating that 80% of customers who experience a poor claims process have either already left their carrier or say they intend to leave. That makes claims more than an operational function. The experience can influence whether years of premiums feel like money well spent or a promise that failed when it mattered.

Speed certainly matters, but so do communication and clarity. Customers want to know what happens next, how long it may take, what information is needed, what their policy covers, and who can help when the process becomes confusing.

Technology can make many of those interactions faster and easier. But efficiency alone isn’t the same as reassurance, particularly when the person on the other side of the transaction is dealing with uncertainty or stress.

Customer Experience Is More Than Customer Service

PwC argues that insurers have an opportunity to move beyond selling products that customers can perceive as interchangeable and provide meaningful value throughout the relationship. That could include helping customers better understand risk, prevent losses, adjust coverage as circumstances change, and access relevant expertise before a claim ever occurs.

That represents a significant shift in the traditional value exchange. Instead of the relationship becoming meaningful primarily when a policy is purchased, renewed or used, insurers can create value between those moments.

PwC also connects customer-centricity directly to business performance, including greater loyalty, advocacy, share of wallet and customer lifetime value. It argues that seamless engagement requires both capable people and technology, allowing customers to move between channels while still receiving appropriate human support when needed.

The goal isn’t simply to create happier customers. It’s to build a relationship customers have a reason to continue.

The Value Exchange Has to Work for Both Sides

Walter Bond teaches that strong relationships operate through a value exchange. People continue relationships when they believe meaningful value is being exchanged, and organizations become more valuable when they understand what the other person actually values.

That principle is especially relevant to insurance because the organization’s definition of value and the customer’s definition can easily become disconnected.

An insurer may see a policy that has been accurately priced, efficiently administered and contractually fulfilled. The customer may be asking something much simpler: Did you help me feel protected? Did I understand what I was paying for? And when I needed you, were you there?

Those questions aren’t opposed to operational excellence. They help define what operational excellence is supposed to accomplish.

For leaders, that means the Playbook has to extend beyond selling and servicing policies. It has to help the Roster consistently deliver the value customers believe they were promised—from the first conversation through renewal, changing needs and, eventually, a claim.

Loyalty Is Earned When the Promise Is Kept

Price will always matter in insurance. So will underwriting, risk selection, product design, claims management, regulatory compliance and financial performance. Trust does not replace any of them.

But in an industry where customers may struggle to differentiate one product from another, trust can become part of the differentiation.

Customers may forget many of the routine interactions they have with an insurer. They’re less likely to forget how the organization responded when their premium changed unexpectedly, when they couldn’t understand their coverage, or when something went wrong and they needed help.

That’s why insurance should not be viewed only as a product sold at a price.

It’s a promise—and the strength of the relationship depends on what happens when the customer asks you to keep it.