The insurance industry has a credibility problem. Only 37% of Americans believe that their insurer will help them when problems arise. This distrust is born from decades of fine print, slow claims, and opaque processes.
As automation and AI change every step of the customer journey, something harder to quantify is being lost along the way. Empathy—the sense that someone understands your situation and has your back—doesn’t scale as easily as software.
That tension defines insurtech. Every insurer is investing in automation, but how to scale without alienating the customer is the bigger issue.
The Automation Paradox
Automation promises speed and efficiency but often erases the nuance and reassurance people need when something goes wrong. A claim isn’t just a transaction: it’s often the worst day of someone’s month, even year. The challenge for insurance companies isn’t to replace empathy with efficiency; they must scale both.
One study found that 80% of auto insurance customers who’ve had a poor claims experience say they’ve already left or plan to leave their carrier. The same study shows that although repair-cycle times have slightly improved, down to 22.3 days on average, satisfaction still trails far behind expectations. It seems that fast doesn’t always mean better.
But even digital progress has its limits. Another report found that customer satisfaction with online claims rose 17 points year-on-year, driven by mobile apps and better automation. However, many users still need to switch between channels to get help, undermining the ease and simplicity that digital CX was meant to deliver.
Jonathan Selby, Technology Practice Lead at Founder Shield, a risk management partner for rapidly evolving, high-growth companies explains, “What my colleague did this week—personally calling a frustrated claims client—is the perfect example of ‘human orchestration,’ not just ‘human-in-the-loop.’ It’s about scaling human empathy, and our strategic challenge is deciding, case-by-case, when to orchestrate human interaction versus when to rely on automation.”
Meanwhile, insurers are racing to modernize. Ninety-one percent are already investing in or actively exploring AI, according to Loadsure’s 2024 report on automation in risk management. But as the systems get smarter, policyholders still want to feel recognized, not just processed.
Companies like GetCovered are rethinking how that recognition happens—and not through more agents or apps, but through systems designed to anticipate needs.
Insurtechs that succeed will be those that understand this paradox. Empathy isn’t the opposite of automation; it’s what automation should enable. And technology should never replace the human touch.
Embedded Insurance as the Middle Ground
When a system anticipates what a customer needs before they ask, that’s efficiency that feels like care. A claim update that arrives just when anxiety peaks, or coverage suggestions that appear before a risky moment, can calm uncertainty instead of creating it. These small, well-timed signals remind people that someone, or something, has their back.
That’s the idea behind embedded insurance. It’s when protection is offered inside another purchase or digital journey, rather than as a separate purchase. Think of being able to insure a new phone at checkout or adding rental insurance when signing a lease.
Traditional insurance asks too much of people at the worst possible moments. Customers have to pause what they’re doing, research providers, compare policies, and navigate jargon. This process often drains trust before coverage even begins. It’s little wonder that nearly half of U.S. renters still go without coverage, even though a renter’s policy costs roughly $15 a month. Many wrongly assume their landlord’s insurance covers their belongings. Embedded insurance avoids this confusion by meeting people where they already are. It makes coverage part of the experience, not an administrative chore.
By building protection into existing platforms—rental apps, property portals, even retailers—companies turn what used to be a cold transaction into a gesture of reassurance. The empathy here comes not from hearing a human voice over the phone, but from human-centered design that eliminates stress.
One company putting this philosophy into practice is GetCovered. The U.S.-based platform doesn’t sell insurance directly but builds the infrastructure that connects property managers, landlords, renters and insurers. Its software embeds coverage options into the moment a renter signs a lease, removing the usual back-and-forth of forms, quotes and reminders.
For the renter, the process feels seamless. Coverage is suggested when it makes sense and not as an afterthought. For property managers, compliance becomes automatic rather than administrative. In both cases, the emotional effect is the same—peace of mind delivered through design.
It’s a small but powerful shift. The empathy once expressed through a reassuring phone call now lives in the flow of the product itself.
Empathy as the Next Differentiator
Technology has long enabled insurance to move faster, but speed alone no longer wins loyalty. What will matter most now is how people feel seen and understood. A recent study from Zurich Insurance Group found that 73% of consumers say they would avoid companies that fail to show empathy and that 71% believe AI cannot replicate genuine human connection.
For startups, that insight needs to become strategic. As automation becomes universal, differentiation will come from the experience around it. Investors and users alike are rewarding products that translate efficiency into clarity. In insurtech, that means designing around real human moments—signing a lease, filing a claim, replacing what’s been lost.
GetCovered’s model offers a glimpse of what that balance looks like in practice. By embedding coverage directly into the leasing experience, it simplifies protection for both renters and property managers—coverage can be secured in minutes, without extra paperwork. Behind the scenes, policies are backed by established carriers and scaled to portfolios of any size, yet the result for users is the same: reassurance without effort.
The more insurers digitize interactions, the more space they have to focus on what technology can’t replicate. That means trust and reassurance that protection will work when it’s needed most. For startups, that’s the opportunity hiding in plain sight. True progress is when protection feels natural and trust is engineered into the experience.
