How AI in Insurance Builds Loyalty That Lasts

Written by:
Mark Camp | CEO & Founder
Propello Cloud

From Rules-Based to Relationship-Building

In the early days, most AI technologies in the insurance sector were built for speed instead of relationships. Rules engines and automated claims processing were valuable, but not quite as transformational as today’s AI technologies. It wasn’t until machine learning gained traction that things began to change. Instead of static decision trees, insurers could train systems to detect fraud, streamline risk assessments, and unlock smarter automation across the policy lifecycle.

But it’s the evolution to generative AI and more specifically, the rise of large language models—that has turned things on their head. These faster calculators can now be thought of as enablers of empathy at scale. With LLMs, customer service teams can resolve complex queries in real time. Chatbots can now converse with genuine context. Claims management systems can pre-empt next steps before a customer even picks up the phone.

At Propello, we see this shift as a massive opportunity to deepen customer relationships. For insurers, generative AI opens up a new frontier for loyalty. Real-time personalisation, intelligent reward triggers, and automated touchpoints through more relevant, well-timed experiences, keep customers engaged between claims and renewals. 

What’s Accelerating the Shift?

So, why is all this happening now? Three main forces have collided:

Data abundance:

The insurance industry has no shortage of data, from policyholder activity, claims history to behavioural insights. What’s changed is the ability to activate that data in meaningful ways.

Compute power:

What used to take weeks of processing can now be handled in real time thanks to cloud scalability and AI-first infrastructure.

Breakthrough algorithms:

From Generative Adversarial Network (GANs) to transformer-based LLMs, there’s now AI models that can understand nuance, simulate judgement, and even communicate with tone and tact.

Together, these shifts allow insurers to broaden their scope in automation. They can create unique experiences that feel timely, relevant, and personal. And that’s exactly where your opportunity lies.

What Does This Mean For Insurance Leaders?

For CMOs and CCOs, this is the strategic moment to redefine how you create added value for customers and retain them for longer.

Over half of insurance carriers now manage their generative AI efforts via centralised teams, often reporting directly to the CTO. It’s a clear signal that AI is moving beyond experimentation. No longer a back-office tool but a frontline asset. A core component that delivers human-centric experiences across the insurance landscape from quote to post-renewal.

When used well, the implications of AI extend to other areas of your service. It doesn’t have to be used solely to optimise operations. It’s a perfectly viable solution for building a rewards journey that feels personalised, frictionless, and genuinely worth staying for.

Onboarding: Start Smart, Stay Engaged

First impressions matter. Replacing bulky welcome packs with short video explainers, in-app onboarding checklists, or interactive guides sets the tone. Add chatbots that guide customers through setup, and you instantly reduce friction—while boosting early confidence.

Automation is becoming crucial here. According to Capgemini’s World Life Insurance Report 2025, 78% of best-in-class life insurers have automated onboarding processes, compared to just 15% of mainstream insurers. That’s a clear signal that leading providers are leaning on AI to create faster, simpler policy issuance experiences from day one. In addition to this, welcome loyalty incentives can be deployed at this stage of the customer lifecycle. 

In-Life Engagement: Personalisation on Autopilot

True personalisation is more than a name in an email. It’s proactive nudges, timely content, and real support based on behaviour and need. AI makes this scalable—sending policy reminders, flagging gaps in coverage, and even suggesting new products at just the right moment.

And there’s clear commercial upside. A McKinsey study in 2023 showed that 76% of consumers are more likely to buy from companies that personalise their experience. For insurers, this should demonstrate how AI-powered personalisation is a definitive competitive differentiator.

Claims: A Moment of Securing Trust

Claims processing has traditionally been the most stressful part of the journey. With AI, we’re seeing huge gains in transparency and speed. Customers can now upload evidence, track claim status in real time, and receive instant updates. Meanwhile, smart claims management systems can flag potential fraud, or alert agents to reach out for complex cases.

Renewal: Don’t Wait Until They’re Leaving

Retention never starts at expiry. It’s built over time, always beginning at the start of the customer journey. AI models help predict churn and trigger re-engagement well before a policy lapses. 

In fact, a 2024 InsurTech Quarterly survey found that 78% of insurance companies are already using or plan to implement predictive churn analytics in the next two years. With these models in play, insurers can identify at-risk customers earlier—and act faster with personalised offers and loyalty triggers.

Combine that intelligence with well-timed retention incentives, and renewal becomes a value-driven conversation, not an admin task.

Quoting & Acquisition: Set Expectations, Not Just Prices

First impressions matter. Customers are not only comparing premiums at this stage, they’ll be assessing value.

How AI helps: AI models can dynamically personalise quote pages based on customer behaviour (like pulling relevant policy recommendations), while smart nudges encourage quote completion. Predictive analytics can identify which customers are most likely to switch and offer tailored acquisition rewards.

Stat: 68% of insurance customers don’t have a provider in mind when they begin their search, meaning AI-powered first impressions can genuinely shape the decision.

Onboarding: Build Momentum Early

The first 30 days determine future trust. Make customers feel confident they’ve made the right choice.

How AI helps: AI chatbots can guide customers through onboarding tasks instantly. AI tools can personalise welcome journeys—triggering emails, onboarding checklists, and video explainers based on policy type, demographic, or behaviour.

Stat: Streamlining onboarding with digital tools can boost retention by up to 37%. Early clarity and care create stronger loyalty.

In-Life Engagement: Don’t Go Quiet

This is where many insurers disappear—and lose relevance. Instead, use this “quiet middle” to stay connected.

How AI helps: Machine learning models predict when engagement is dropping. AI-driven platforms can automate personalised nudges (like seasonal rewards, no-claims bonuses, or educational content) based on customer activity patterns—not guesswork.

Stat: Customer satisfaction drops significantly—42% of the time—when customers have to actively chase answers. AI helps stay ahead of questions with proactive touchpoints.

Claims: The Trust-Defining Moment

The claims experience is where loyalty is either won—or permanently lost.

How AI helps: AI automates claims triage, instantly routing simple claims for approval while flagging complex ones for human support. AI chatbots can offer real-time claims updates, while intelligent systems deploy “thank you” loyalty rewards once claims are closed satisfactorily.

Stat: 86% of customers who found the claims process “very easy” said they’d definitely renew, compared to just 41% when it wasn’t.

Pre-Renewal: Reinforce, Don’t Repeat

This is your last window to prove you’re worth sticking with. And it should never start two weeks before expiry.

How AI helps: Predictive churn models identify who’s at risk of switching. AI systems can trigger personalised renewal campaigns—offering tier unlocks, cross-sell suggestions, or loyalty rewards precisely when and where they're needed.

Stat: 49% of auto insurance customers shopped for a new provider last year, and 29% switched. AI lets you intercept that risk early.

Post-Renewal & Advocacy: Turn Retention into Growth

Loyal customers drive advocacy and referrals, which fuel growth. 

How AI helps: AI platforms spot loyal advocates based on engagement and claims history. Generative AI tools can automate refer-a-friend invitations, anniversary rewards, and loyalty upgrade offers tailored to individual milestones.

Stat: Insurance clients acquired via referrals have a 37% higher retention rate than non-referred customers—proof that loyalty fuels growth.