Does CX in insurance still matter?
Plus, CX lip service, Nike's worst day in history, and profits over passengers
???Hi friends,
?Happy Second Thursday of September. The kids are back to school, summer vacations are wrapped, and we’re back here in your email inbox to consider the future of CX in insurance.
?For over a decade now, the insurance industry has touted the importance of customer experience. It's a track at every conference and a beat in every trade journal; budgets have been adjusted, investments made, and we’ve all read countless case studies, surveys, and indexes. Yet (as we've discussed in a?previous newsletter) customer experiences, not just in insurance but in almost every other industry, are, in fact,?getting worse. Customer sentiment in the insurance sector is at its lowest since 2015.??
?Which, of course, begs the question: does customer experience in insurance still matter? And did it ever?
?If you were to ask McKinsey, at least back in 2023, they'd tell you that for insurance carriers, customer experience matters now more than ever. But… does it? Insurance companies are posting record profits while customer satisfaction is flatlining and premiums keep climbing.?
We know that CX initiatives take time to bear fruit, but can the same be true for CX failures? Is the industry in for a reckoning?
?Let's jump in.
??? The Baker's Take
The state of CX in insurance
?“It’s really about finding that sweet spot where you’re both efficient and delivering a great experience. That’s not easy. Design can bridge that gap. Digitization is necessary, but it needs to be thoughtfully integrated into the overall CX strategy. The companies that do this well balance digital convenience with human empathy.”
???? The Outside Take
Nike's worst day in history
On June 28th, Nike experienced its worst day in history, losing $28 billion in market value as its shares dropped 20%.
While buying insurance and shoes might seem worlds apart, Nike’s missteps offer crucial lessons for the insurance industry—and beyond.
In January 2020, Nike’s CEO John Donahoe made a bold move to prioritize direct-to-consumer (DTC) sales, cutting ties with wholesalers and moving away from the retail relationships that had fueled the brand’s success. The fallout was predictable: the brand weakened, and the ecosystem it depended on fractured.
Nike focused on the easiest metrics—online traffic and existing customer behavior—while ignoring harder-to-measure elements like brand loyalty and product-market fit. This created a disconnect with everyday consumers.
The insurance industry should know better than any industry that CX isn’t just about data and the end consumer; it’s shaped by a broader network—agents, brokers, employees, and partners. Insurers who chase digital efficiencies (AI, ahem) while sidelining these key players risk losing trust and damaging relationships.
The lesson? As we've discussed elsewhere, insurers need to invest in the entire value chain. They have to recognize the importance of in-person touchpoints—whether with an agent, broker, or customer service rep—in creating experiences that truly resonate with policyholders and everyone involved in the business.
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?? Our Take
We asked our team: Does CX in insurance still matter? What does the future hold?
“As long as there are customers, there’s an experience. So regardless of investment or commitment, the customer will be experiencing the product and service—it just comes down to who opts to control it and who doesn't.
One thing working in favor of the insurance industry—where customer expectations are low, even small, positive moments can make a significant business impact, especially at a time when others are tabling their CX efforts. There is a massive opportunity right now for insurance companies to differentiate.”
— Josh Levine, Founder & CEO
“I think a big part of CX — for insurance and other industries — will be understanding what are the high-value moments that are worth investing in versus the mundane, repetitive ones that can or should be automated/AI’d.?Finding that right balance will lead to a better CX overall AND may allow for strategic cost-cutting. It's honing in on that overlap of what is valuable to the customer and what is valuable to the organization.”
— Erin Eisinger, Strategist
“History has proven that economic downtimes are a great opportunity for businesses to leapfrog their competitors who are more reactive or shifting priorities away from CX and reap the benefits when things pick back up. It’s all so cyclical. I think of financial concepts like 'buy the dip' or Warren Buffett's 'Be fearful when others are greedy. Be greedy when others are fearful. Staying consistent, investing when others aren’t. It's what smart strategic leaders do. As our CEO Josh is always reminding us, the customers and users aren’t going away.”
— Michael Piastro, User Experience Director
??? The Internet's Take
Best state of CX reads. Sourced from our crew at C&A
?? Oh, and in case you missed it ...
Despite decades of industry investment in CX, claims remain a huge source of frustration for policyholders. Still, some lines of business have found ways to resolve claims faster, offer more personalized support, and provide value beyond monetary compensation. How might some of these enhancements be standardized across the claims experience to help insurers better connect with their customers??
Cake & Arrow is a UX design & product innovation agency that works exclusively with insurance companies. We help carriers, distributors, and service providers to uncover new opportunities in unmet customer needs and design innovative products and services that drive change and business growth.
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