Safe hands, Smarter systems – How insurance is evolving with data

In a digital-first world where customer expectations are shaped by real-time experiences, the ability to collect, interpret, and activate first-party data is a competitive advantage across every sector – from retail and telecom to travel and healthcare.

The insurance industry is no exception – the sector is undergoing a digital shake-up, with traditional insurers and insurtech players competing for policyholder engagement. While both leverage first-party data, insurtechs are often faster, more agile, and better at delivering personalized experiences.
Here’s a side-by-side look at how each approaches Customer Relationships Management (CRM) and first-party data strategies:

Data Collection & Customer Insights

Traditional insurers – robust data, slow activation:

• Strength: Years of customer policies, claims history, and risk profiles offer a rich foundation.
• Challenge: Legacy systems and siloed data make real-time personalization difficult.

Example: A traditional insurer may take weeks to identify upsell opportunities for travel insurance, missing the window to engage customers before their trip.

Insurtechs – real-time insights, digital-native:

• Strength: Designed for digital, insurtechs collect behavioral data via apps, wearables, and AI-based interactions.
• Challenge: They may lack the long-term depth of traditional policyholder data.

Example: Lemonade can instantly assess user behavior and policy preferences to personalize coverage options on the fly.

Personalization & Customer Experience

Traditional insurers – segmented, not personalized:

• Strength: Broad portfolios (life, health, property, auto) tailored by demographics and risk models.
• Challenge: Personalization is often rule-based, not real-time.

Example: All customers aged 35–45 may receive the same life insurance renewal email, regardless of lifestyle or family status.

Insurtechs – AI-driven personalization:

• Strength: Machine learning enables dynamic policy suggestions, real-time quotes, and responsive coverage updates.
• Challenge: Narrower product ranges limit cross-selling opportunities.

Example: An insurtech app might adjust your home insurance coverage based on new smart devices it detects in your home.

Omnichannel Engagement & UX

Traditional insurers – multi-channel, low cohesion:

• Strength: Offer a mix of in-person agents, call centers, apps, and web portals.
• Challenge: Disconnected experiences lead to repetition and friction.

Example: Customers might complete an online quote, but still need to call or visit a branch to finalize the policy.

Insurtechs – seamless digital-first journey:

• Strength: End-to-end digital enrollment, claims, and support via app or platform.
• Challenge: Lack of human touch for complex claims or elderly customers.

Example: A user can buy renters insurance, file a claim, and receive payment all within a single app session.

Customer Retention & Loyalty

Traditional insurers – trust-driven, but outdated programs:

• Strength: Long-standing relationships and strong brand equity.
• Challenge: Loyalty programs are often under-leveraged and not data-driven.

Example: Offering small discounts for bundling policies, without ongoing engagement or personalization.

Insurtechs – instant value & gamification:

• Strength: Reward behaviors (like safe driving or health goals) in real time to keep customers engaged.
• Challenge: Retention can drop if rewards stop or competitors offer better convenience.

Example: Vitality rewards customers for staying active with points, perks, and premium reductions.

Who’s Leading?

Traditional insurers still win on trust, regulatory compliance, and experience. But to stay competitive, they must evolve their tech stacks and CRM strategies to meet today’s real-time expectations. Insurtechs, meanwhile, are reshaping the industry with smart, customer-first innovations, but need to prove they can deliver consistent value and earn lasting trust.

The future?

It belongs to hybrid players – those who combine the scale, credibility, and regulatory rigor of traditional insurers with the speed, personalization, and tech-savviness of insurtechs.

Romania’s insurtech sector is on the rise, with companies like Life Is Hard or Pago proving that insurance can be both digital-first and deeply personal. With strong local talent and smart solutions, the industry is poised to shape a more responsive, human-centered future.

Photos @Unsplash, Pexels