Insurance Customers Still Prefer Live Phone Service

Every few years, someone declares that the phone is dead. Text messaging replaced it. Then chatbots replaced it. Now AI will replace it.

Yet when people have an important question, need immediate help or face a complicated situation, they still pick up the phone.

Insurance is built around exactly those moments. Whether someone needs help understanding coverage, purchasing a policy or reporting a claim after a loss, they want answers they can trust. For insurers, delivering exceptional phone service is no longer just a customer experience initiative. It's a competitive advantage.

Which Customers Prefer Phone?

People of all ages still pick up the phone when they need to reach out to a business.

McKinsey & Company¹ asked people which communication channels they would use if they were unable to solve an issue using self-service. They were given four communication channels: live phone, live chat or messaging, email and social media.

Live phone ranked among the most preferred support channels across every generation:

• Baby Boomers: 94%
• Gen X: 86%
• Millennials: 81%
• Gen Z: 71%

Perhaps the most surprising finding is that even Generation Z, a generation known for texting and social messaging, still prefers speaking with someone when the issue matters.

The lesson is simple. Customers may prefer digital channels for everyday communication, but they still value human conversation or a humanlike conversation when they need confidence, reassurance and quick answers.

When Do Customers Prefer Phone?

Insurance is rarely simple. Whether someone is shopping for coverage, updating a policy or reporting a claim, they often have questions they can't easily answer on their own.

That's exactly when the phone becomes the preferred channel.

A TransUnion² study found that nearly 80% of consumers consider the phone an important way to communicate with businesses. Consumers are especially likely to call when an issue is personal, complex, high value or urgent.

Insurance interactions frequently check every one of those boxes.

Imagine these situations:

• A first time homebuyer needs homeowners insurance before closing. They're unfamiliar with the process, worried about making a mistake and want immediate guidance. They call an insurance agency for help.
• A severe storm has damaged a family's roof. Rain is pouring into the house, and they need to know what to do next. They aren't looking for a chatbot. They want immediate answers and reassurance.

These aren't unusual situations. They're everyday insurance conversations.

How Have Service Expectations Changed?

While the importance of the phone hasn't changed, expectations around phone service have.

Not long ago, customers accepted that businesses were available only during normal business hours. Waiting on hold was frustrating, but it was expected.

Today's customers expect something very different.

Smartphones have made businesses constantly accessible. Digital experiences have conditioned consumers to expect immediate responses. If they can receive help through a chatbot at midnight, they increasingly expect the same level of availability when they call.

According to Zoom³, there is now a significant gap between what customers expect and what many organizations deliver.

• Eighty five percent of customers want short wait times, but only 51% say they experience them.
• Eighty eight percent expect fast issue resolution, but only 64% say they receive it.
• Seventy six percent expect around the clock availability, but only 53% say businesses provide it.

For insurers, these expectations matter because insurance doesn't operate on a schedule. Storms don't wait until Monday morning. Auto accidents don't happen only during business hours. Customers expect their insurer to be there whenever they need help.

How Can Insurers Meet Modern Phone Service Expectations?

Customer patience is limited.

Research cited by Talkdesk⁴ shows that most callers will abandon a call after waiting about 90 seconds.

The consequences extend beyond one missed conversation. According to Zoom, dissatisfied customers often leave negative reviews, share poor experiences on social media and warn friends and family to avoid the business altogether.

The obvious solution would be to answer every call immediately, twenty four hours a day, seven days a week.

For most insurers, that's simply not practical.

Staffing enough people to handle unpredictable call volumes around the clock is expensive. During catastrophe events or seasonal surges, call volumes can increase dramatically with little warning. Maintaining enough excess staffing to prepare for those moments isn't financially sustainable.

This is where Voice AI changes the equation.

Liberate's insurance native Voice AI answers every call immediately, eliminating hold times while delivering consistent service around the clock. Rather than replacing insurance professionals, Voice AI handles routine conversations and orchestrates the work behind them, allowing employees to focus on situations that require judgment, empathy and expertise.

Because Voice AI integrates with core insurance systems, it can authenticate callers, answer policy questions, collect payments, initiate first notice of loss, update customer information and complete other common service requests.

The result is better customer experiences, lower operating costs and a more scalable service model.

The future of customer service isn't choosing between people and technology. It's making sure every customer receives immediate help while your employees spend their time where they create the greatest value.

Sources:

1. https://www.mckinsey.com/capabilities/operations/our-insights/where-is-customer-care-in-2024
2. https://newsroom.transunion.com/nearly-80-of-consumers-consider-phone-channel-important-for-communicating-with-businesses-despite-reluctance-to-answer-calls/
3. https://www.zoom.com/en/blog/cx-trends-consumer-expectations/
4. https://www.talkdesk.com/blog/how-long-do-callers-wait-before-they-hang-up/