A growing number of younger insurance customers are walking away from their providers due to poor digital experiences, according to new data from Insurity.
The software company’s 2025 Digital Experience Index, based on a national survey of policyholders, highlights a widening gap between insurer capabilities and the expectations of digitally native consumers.
According to the survey, 28% of Gen Z and 21% of Millennials reported switching insurers after a frustrating experience with an online portal or mobile app. In some cases, digital friction is severe enough to discourage policyholders from using core services.
Twenty-six percent (26%) of Gen Z and 21% of Millennials said they have avoided filing a claim altogether because they found the digital claims process too difficult to navigate.
“Younger generations aren't just digital natives; they are the ultimate test of your technological credibility,” said Sylvester Mathis, chief revenue and insurance officer at Insurity. “If your online portal or claims app isn’t intuitive, fast, and responsive, you're risking not just user frustration but their trust and their loyalty.”
The findings add urgency for insurers as Gen Z and Millennials continue to grow in both economic influence and share of the insurance customer base. While 61% of Millennials and nearly half of Gen Z respondents prefer paperless communication, the survey also found that trust in automation remains limited.
More than half of Gen Z policyholders said they would only trust fully automated insurance processes under certain conditions, indicating a cautious approach to digital transformation that prioritizes transparency and control.
The disconnect between customer expectations and insurer capabilities poses more than an operational challenge. In a market where convenience often drives loyalty, digital usability has become a key competitive differentiator.
Insurity’s report signals a broader shift in the insurance industry, where digital strategy plays an increasingly central role in customer engagement. For insurers, the message is clear: enhancing digital experiences is no longer optional. Those that fail to deliver streamlined, user-friendly platforms risk being left behind by a generation that expects more and is willing to look elsewhere to find it.
