Digital brings challenges for small, midsize life insurers: Equisoft

Insights:

• Respondents suggest limited real-time analytics and legacy systems hinder an end-to-end customer experience and the integration of multiple channels. 
  

• Only a quarter reported real-time data capabilities. 
  

• Twenty-eight percent of respondents said they are currently planning to implement artificial intelligence for chatbots or automation. 
  
• Digital Insurance surveyed professionals about the claims process last year. The results highlight what is driving changes to the process.

Small and midsize life insurance companies are concerned about customer experience and face challenges updating systems and adopting technology, according to research from Equisoft in collaboration with the Life Insurers Council (LIC). 

The survey includes responses from a third of LIC, a forum for small to midsize life insurance company members of LIMRA and LOMA.

The main driver for digital transformation is customer experience. But 54% of respondents said their organizations only support one to two communication channels for customer support. More than a third of respondents, 38%, cite legacy IT systems lacking automation capabilities as a primary challenge to streamlining underwriting decisions. 

Mark DePhillips, SVP, USA at Equisoft, said in a statement: "Life insurance carriers want to deliver on their original mission of protecting and enriching customers' lives, and they want that mission to thrive in the 21st century. There are a lot of opportunities to boost customer experience and engagement, but limited resources can, understandably, make it difficult to roll out large-scale programs."

The report suggests prioritizing investments in self-service tools and data management. Many respondents did suggest they are focusing on digital sales and service solutions over the next 12 to 24 months.

Respondents reported the digital tool adoption for agents is limited. Half of companies provide digital tools to agents to a moderate extent, but only 25% do to a great extent. 

Consumers are also looking for a better digital claims process, according to the 2025 Digital Experience Index from Insurity. The survey was conducted online in April 2025, and includes more than 1,000 adult participants who were randomly selected across the U.S. 

The results suggest one in five consumers avoid filing claims due to the frustrating digital process and 64% would consider switching insurers for a better digital experience.