Insurance Customer Experience Is an Operating Model Issue

For Insurance COOs, customer experience is increasingly difficult to separate from operational performance.

Claims, complaints, servicing, digital journeys, underwriting, outsourced partners, regulation and cost-to-serve may sit in different parts of the organisation.

The customer experiences them as one business.

That distinction matters.

Because when customer experience deteriorates, the problem is not necessarily that an organisation needs another CX initiative.

It may be signalling something much deeper in the operating model.

The COO’s customer challenge has changed

Insurers have spent years investing in digital transformation, automation and self-service.

At the same time, regulatory expectations around customer outcomes have increased significantly.

The FCA’s Consumer Duty is explicit that firms must act to deliver good outcomes for retail customers, including providing effective support and avoiding foreseeable harm.

For the COO, the challenge therefore isn’t simply:

How do we improve customer satisfaction?

It is closer to:

How do we design an operation that delivers better customer outcomes, at a sustainable cost, consistently and at scale?

That is a very different leadership question.

Customer friction is operational data

Complaints remain one of the clearest signals.

Insurance & Pure Protection firms recorded more than 665,000 complaints in the second half of 2025 alone.

The more interesting question for an operational leader is not simply how quickly those complaints are closed.

It is:

What is causing them in the first place?

A complaint may reveal:

• a poorly designed customer journey
• confusing communication
• an ineffective hand-off
• a process built around internal structures rather than customer need
• poor data
• insufficient frontline authority
• problems with an outsourced partner
• technology that works technically but not operationally

That is why complaints should not sit at the edge of the operating model.

They are an intelligence source for it.

Digital doesn’t automatically mean better

The case for automation and self-service in Insurance is obvious.

Used well, technology can remove friction, reduce cost and make straightforward interactions dramatically easier.

But the objective cannot simply be to move customers out of human channels.

The better question is:

Which interactions should technology simplify — and where does human judgement still create value?

An automated renewal journey is very different from a customer trying to resolve a complex claim after a distressing event.

Both may benefit from technology.

They do not necessarily require the same operating model.

The strongest insurers will increasingly be those able to distinguish between transactions that should be effortless and interactions where empathy, judgement and expertise genuinely matter.

Start with the customer need, not the channel

One of the traps in operational transformation is optimising channels independently.

Reduce calls.

Increase digital adoption.

Improve self-service.

Decrease handling time.

Each metric can be useful.

But viewed in isolation they can produce unintended consequences.

A customer may call because the digital journey failed.

They may complain because information was unclear.

They may contact repeatedly because nobody resolved the underlying problem the first time.

Reducing the number of calls does not necessarily mean the experience improved.

This is why the stronger operational question is:

What need is driving the contact?

Once that is understood, organisations can make better choices around automation, process, resource and service design.

Customer experience and cost-to-serve are not opposites

There is sometimes an assumption that better customer experience costs more.

It can.

But poor experience also carries significant operational cost.

Repeat contact, complaints, rework, escalations, compensation, churn and manual intervention all consume resources.

A poorly designed journey therefore damages both the customer proposition and operational efficiency.

That creates an opportunity for the COO.

Customer experience can become a lens through which to identify:

Where are we making it unnecessarily difficult for the customer — and unnecessarily expensive for ourselves?

Often the two problems sit in exactly the same place.

The outsourced operation still belongs to you

This matters particularly in Insurance because customer journeys frequently cross organisational boundaries.

Claims handlers.

Repair networks.

Contact centres.

Technology partners.

Brokers.

Third-party administrators.

Customers rarely care which company technically employs the person or operates the system.

They experience the insurer’s brand.

Recent FCA research reinforces the importance of this point: poor service or communication from both insurers and outsourced service providers featured among common problems customers experienced when making general insurance claims.

So outsourcing activity does not outsource accountability for the customer outcome.

That puts supplier governance, operational standards and partner performance firmly on the COO agenda.

Personalisation needs to solve a problem

Data and AI create enormous opportunities for insurers.

But personalisation should not simply mean inserting someone’s name into a digital journey or generating another next-best-action.

The more useful applications are likely to involve understanding:

• customer vulnerability
• likelihood of contact
• emerging service failure
• claims behaviour
• retention risk
• communication preference
• where intervention could prevent a problem

The objective should be relevance.

Not simply more interaction.

Customer leaders need commercial credibility

There is a leadership implication here too.

Customer experience becomes harder to influence when it is discussed separately from business performance.

Senior Customer leaders increasingly need to understand:

• operational economics
• loss and claims environments
• cost-to-serve
• retention
• revenue
• regulation
• digital investment
• workforce requirements
• commercial trade-offs

Equally, COOs need to understand customer behaviour rather than seeing CX as somebody else’s functional responsibility.

The strongest organisations increasingly connect the two.

Five questions Insurance COOs should be asking

Rather than beginning with another CX programme, I would start with five questions.

1. Where is customer friction creating operational cost?

Look for repeat contact, complaints, rework and avoidable manual intervention.

2. Are we measuring activity or outcomes?

Fast handling times and high digital adoption mean little if customers still cannot solve their problem.

3. Where should humans genuinely add value?

Use automation deliberately rather than treating removal of human interaction as the objective.

4. Where do organisational boundaries break the journey?

Examine transitions between functions, systems and third-party partners.

5. Does our leadership team connect customer and commercial performance?

If Customer, Operations, Digital and Commercial are pursuing separate outcomes, the customer will usually experience the gaps.

The Leadership Signal

The next stage of Insurance customer experience is unlikely to be won by another layer of CX activity.

It will be won in the operating model.

By organisations capable of connecting:

customer outcomes
operational performance
technology
data
people
commercial economics
and regulation.

For COOs, that makes customer experience less a question of service design and more a question of how the entire organisation works.

Perhaps the most useful question is no longer:

“How do we improve CX?”

It is:

“Where is our operating model making it unnecessarily difficult for customers — and what is that costing the business?”

Strengthening Operations or Customer Leadership in Insurance?

Douglas Jackson works with Insurance and Financial Services organisations appointing senior leaders across Operations, Customer, Transformation, Strategy, Data and wider Executive leadership.

We help organisations identify leaders capable of connecting customer outcomes with commercial and operational performance.

Talk to us about your next Insurance leadership appointment →