New research from Equisoft and LIC reveals a stark reality: 80% of small and medium life insurers operate at medium or lower CX maturity levels. For CIOs navigating tight budgets and competing priorities, this presents both a challenge and an opportunity. The data shows that digital tools for agents—not flashy AI implementations—represent the most impactful investment for improving customer experience and operational efficiency.
The Current State: A Reality Check #
The insurance industry faces a CX maturity crisis. Only 19.4% of surveyed companies have achieved above-average CX maturity, with a mere 6.5% reaching high maturity levels. This isn't just about falling behind on trends—it's about fundamental operational challenges that directly impact your bottom line.
When asked about their top CX concerns, insurers revealed where they're focusing their attention and resources:
- Customer service (51.6% of companies cited this as their primary CX concern)
- Application and underwriting process (41.9% see this as their main challenge)
- Advisor engagement (22.6% identify this as their top priority)
- Employee productivity (19.4% focus here first)
- Claims (12.9% consider this their primary concern)
What's particularly revealing is that companies focusing on application and underwriting show the highest average maturity (60.9%), while those prioritizing advisor engagement lag significantly (45.2%). This disparity suggests years of investment in core policy issuance processes while distribution capabilities remain underserved.
The Technology Differentiation Factor #
The research uncovered a critical insight: digital tools for agents showed a 67.7% correlation with both data quality improvements and stronger CX culture. This isn't coincidental—it's the clearest differentiator between market leaders and laggards.
High-maturity companies excel in:
- Providing digital tools for agents
- Enhancing the quality of their data
- Building a CX-focused organizational culture
Meanwhile, even industry leaders struggle with:
- AI/ML usage
- Digital claims processing
- Omnichannel capabilities
Breaking Through Budget Constraints #
Budget limitations emerged as the dominant challenge across all companies (48.4%), but the research reveals a path forward. Companies achieving higher maturity demonstrate that strategic, focused investments yield better results than scattered technology initiatives.
The most impactful investments, based on implementation priorities across all concern areas:
- eApplication Software (cited by 77.4% as a priority)
- Agent Self-Service Portals (67.7% priority rating)
- CRM Systems (41.9% priority rating)
These aren't the newest or most exciting technologies—they're foundational systems that directly address operational pain points while improving agent and customer experiences.
The Data Foundation: Your Hidden Competitive Advantage #
Data quality and integration capabilities form the bedrock of CX maturity. The research shows companies with strong data foundations achieve:
- Better agent retention (33.3% focus in high-maturity companies vs. 9.1% in low-maturity)
- More balanced business objectives beyond cost reduction
- Greater ability to implement advanced technologies successfully
For CIOs, this means prioritizing:
- Data cleansing and standardization initiatives
- API-based integration strategies
- Master data management for customer profiles
- Real-time data synchronization between systems
Strategic Recommendations for CIOs #
1. Start with Agent Enablement #
The correlation between digital agent tools and overall CX maturity is too strong to ignore. Focus first on:
- Modern agent portals with self-service capabilities
- Mobile-responsive tools for field agents
- Integrated illustration and application software
- Real-time commission and policy status visibility
2. Build Your Data Foundation #
Before chasing AI initiatives, ensure you have:
- Clean, integrated customer data across all systems
- Standardized data governance processes
- APIs connecting core systems (policy admin, CRM, claims)
- Analytics capabilities to measure CX improvements
3. Align Technology with Business Outcomes #
High-maturity companies show more a sophisticated understanding of the impact of CX on their performance. CIOs in companies that are not yet CX mature need to move beyond framing CX as pure cost reduction opportunity (this was cited by 71.0% as primary goal) and expand their CX thinking and objectives to include:
- Agent productivity and retention metrics
- Customer lifetime value optimization
- Cross-sell and upsell capability enhancement
- Time-to-issue improvements
4. Address the Advisor Engagement Gap #
Advisor engagement shows the lowest maturity scores, which represents a significant opportunity. Action items for CIOs should include:
- Implement dedicated advisor relationship management tools
- Create mobile apps for real-time client interaction
- Develop automated marketing and lead distribution systems
- Provide data-driven insights to improve advisor performance
The Path Forward: Practical Next Steps for CIOs #
- Assess Your Current State: Benchmark your organization against the seven key maturity indicators identified in the research.
- Prioritize Based on Impact: Focus on the 2-3 initiatives that will most directly address your primary concern area while improving agent capabilities.
- Build Incrementally: Start with pilot programs that demonstrate ROI before full-scale implementations.
- Measure Relentlessly: Establish KPIs that connect technology investments to business outcomes.
- Foster CX Culture: Technology alone won't solve the problem—invest in change management and organizational alignment.
Conclusion: The Competitive Imperative #
The research makes clear that building CX maturity isn't optional—it's a competitive necessity. With 80% of the market operating at suboptimal levels, the opportunity for differentiation is significant. CIOs who focus on foundational technologies, data quality, and agent enablement will position their organizations to capture market share from less mature competitors.
The leaders in this space aren't necessarily those with the biggest budgets or most advanced AI implementations. They're the organizations that have systematically built digital capabilities where they matter most: empowering agents, integrating data, and creating seamless customer journeys.
For CIOs of small and medium life insurers, the message is clear: start with the basics, build systematically, and maintain relentless focus on the agent and customer experience. The path to CX maturity is well-defined—the question is whether you'll take the first step.
Based on research conducted by Equisoft and LIC surveying 31 respondents from 25 small and medium life insurance companies.
