Customer Engagement in Insurance: How to Stop Churn Before It Starts

Written by:
Mark Camp | CEO & Founder
Propello Cloud

Limited Engagement Opportunities Between Renewals

Traditionally, insurance is a low-touch sector. In the past there was very little interaction between sign-up and renewal. Some customers may have this dynamic embedded in their minds, and as a result, that’s influencing their behaviour. To break the mould insurers will need to be proactive in their communication efforts.

The Digital Experience Gap in Insurance

Legacy systems are still rife in the insurance sector. This digital debt shows up in the customer experience as a slow, impersonal, and inconsistent service. Friction emerges at every stage of the policyholder journey, the opposite of the seamless, real-time interactions that today’s digital-first customers expect.

Rebuilding Trust in an Online-First Insurance Landscape

The age of online interaction has rewritten the rules for earning customer trust. Today’s policyholders want transparency around data use, value exchange, and the absence of hidden catches. Insurers must prove themselves at every digital touchpoint. In this context, credibility and reliability are just as important as convenience and personalisation.

Connecting With the Digitally Empowered Policyholder

Today’s insurance customers are digitally fluent. They expect the same on-demand experiences they get from leading consumer brands. Engagement strategies must reflect this mindset. Relevance, speed, and convenience are essential across digital channels that customers actually use (mobile apps, social media platforms and real-time messaging).Therefore, consider an omnichannel marketing strategy too.

Meeting the Needs of a Diverse Customer Base

Demographics vary widely and behaviours and expectations are even more nuanced. Effective engagement means understanding customers on an individual level. Insurers should implement smart customer segmentation, data-driven insight, and tailored outreach, and meet younger, digital-native customers where they are, while still delivering meaningful value to older, more traditional policyholders.

1) Loyalty and Reward Programmes 

Loyalty programmes are among the most effective digital tools insurers can use to drive ongoing customer engagement and ultimately retention. With an insurance reward programme in place, insurers can increase positive interactions throughout the policy lifecycle by offering rewards from closely aligned brand partners, which we'll discuss more in the next section.

These programmes are a value add for customers and offer an opportunity to offset their policy cost through savings and discounts on products that they would purchase anyway.

A good loyalty programme can also incentivise desirable customer actions such as a policy renewal, cross-sells or upsells or a referral, by using conditional rewards.

By incentivising these actions, insurers create more regular opportunities for meaningful interaction. This is especially important in insurance, where relationships are typically low-touch.

 

Done well, insurance loyalty programmes turn passive policyholders into active participants, and give customers a lasting sense of connection to their insurer all year round.

Find out more about insurance loyalty and reward programmes in our guide.

2) Hyper-Relevant Brand Partnerships

Continuing on from loyalty and reward programmes, brand partnerships are critical to these programmes and widen the scope of value creation.

Perfect Pet, for instance, collaborates with pet-focused brands like tails.com and Protect My Pet, offering nutrition and health perks through their reward programme. 

These partnerships provide policyholders with real, everyday benefits tied to their lifestyle. For insurers, this drives regular engagement between renewals and unlocks partner revenue streams (via affiliate commission for example). It matters because it transforms low-touch policies into high-frequency value exchanges. Plus, it helps insurers stand out.

In a competitive market with near-identical coverage and pricing, strategic brand partners offer a powerful edge in engagement and long-term customer retention. 

3) Gamification 

Gamification introduces game-like mechanics into loyalty programmes. What otherwise would be static touchpoints are reimagined into interactive experiences.  Think elements like challenges, leaderboards, spin-to-win games, and tier progression. Each of these motivate repeat behaviours and build habit-forming engagement. 

The thing about gamification, it adds another dimension to your loyalty initiatives. Mechanics like points-based loyalty still have their uses (although not really applicable to insurers) . But they’re so common now that customers expect more in their experiences with the brands they choose. Gamification presents the universal attractive concept of play, progression, and recognition. 

Research shows gamification can boost engagement by up to 47% and brand loyalty by 22%. For insurers, this means greater participation between renewals and more emotional stickiness with your brand.

4) Incentives that Reward Positive Behaviour 

Our recent Loyalty Uncovered Report found that insurance providers in 2025 are prioritising investments in engagement. As loyalty programme tech progresses, we’re beginning to see a shift in behaviour-based engagement. 

Using real-time customer data from insuretech like telematics or wearables deepens customer relationships because insurers can nudge policyholders toward safer or healthier habits. Not only does this drive down claims, it increases the insurer’s presence in the policyholder’s life in a way that’s non-intrusive and natural and opens up the opportunity for a policy renewal. 

Programmes like Vitality use this approach to personalise rewards, create meaningful touchpoints, and reinforce long-term behaviour change with specific customer segments. It’s a shift from one-off perks, building instead a continuous loop of engagement where customers feel supported in improving their lives. In many ways, it positions insurers as an active partner, not just a service provider. 

How different insurance sub-sectors can engage their customers through incentivising positive behaviours.

5) Referrals as an Engagement Tool 

Referral programmes give satisfied policyholders an opportunity to advocate the brand to their friends and family. Naturally, a byproduct of this is improved acquisition. But they also establish a robust engagement loop. Because insurers that reward customers for referring friends or family are encouraging deeper emotional investment in the brand. 

What follows is a two-way relationship, where customers feel valued and involved. Adding gamified or tiered incentives can enhance impact, turning casual recommenders into true brand champions. Well-structured referral schemes

6) Personalised Content and Communication 

In today’s insurance landscape, personalisation is at the centre of effective engagement. Tailored messaging that’s relevant to customers on the individual level makes them feel seen and understood. As a result, it builds rapport with the customer because they feel the brand knows them on a personal level. 

Using data, insurers can tailor messaging to life stage, policy type, and behaviour. They could send out birthday wishes, a reminder on insurance products they’ve browsed, tailored advice at renewal, and even personalised videos. The number one rule; relevance is always key. 

Personalised communication builds trust, shows attentiveness, and creates the sense that customers are understood and seen – not just another policy number. 

7) Community Clubs and Events 

Creating a community gives insurers a powerful way to build lasting relationships with their most passionate customers.

Take Hagerty, a classic car insurer, which also runs HDC UK, a drivers club, which offers a space for classic car enthusiasts to connect, access exclusive content, and participate in events.  

With their dedicated Propello rewards platform, Hagerty promotes its Drivers Club as a customer benefit, allowing classic car insurance policyholders to become active members of a lifestyle-driven community.

Community invokes a sense of belonging and shared identity, both of which are key drivers of long-term engagement. For insurers, it’s a way to go beyond policies and become a brand customers choose to spend time with.

Hagerty Drivers Club benefits for classic car insurance policy holders. Get the full case study to see how this classic car insurer is engaging its customers.

Artificial Intelligence and the Future of Customer Service

AI is redefining how insurers engage at scale. From a customer’s perspective, most of us will have seen chatbots. Behind the scenes, those involved in the insurance sector may have also seen predictive data analytics at work. These tools enable faster, more relevant support and help us to predict customer needs before they arise.

Purpose-Driven and Values-Based Engagement

Today’s insurance customers still expect protection but they’re also increasingly looking for purpose.

A 2023 global study found that 80% of insurance customers want providers to embed ESG and sustainability into their offerings. Yet only half of the insurers we spoke to plan to act on this within the year. 

Brands that align with customer values will be better positioned for the long term. As insurance customers shift toward emotional loyalty, businesses will need the right strategies in place to meet those expectations. It’s quickly becoming apparent that price alone is no longer enough to sustain meaningful, long-term engagement.

Feedback, Co-Creation, and Customer-Led Innovation

Insurers are increasingly turning customers into co-creators. Both Deloitte’s research and our own experience working with insurance companies point to the same conclusion: co-created solutions tend to drive faster innovation, deeper engagement, and more relevant offerings.

But are there any implications of co-creating with policyholders? Could the sector be shifting toward customer-led innovation? One example is Swiss health insurer Sympany, which formed a 250-member customer council to help shape service improvements. 

Across the industry, a two way approach in engagement is showing promise. While some examples focus more on feedback loops than full on co-creation, the adoption of real-time customer feedback mechanisms is growing, and laying a foundation for more collaborative, insight-led service design. In one case, Allianz used real-time listening to reduce complaints by 23% and increase NPS by 11 points.