Improving insurance with a shift to life-centricity

Insurance is no longer just about policies and claims. The industry is beginning to focus on customer protection and support. Instead of fixed coverage, insurers are designing solutions that fit into everyday life.

Traditional models often fail to meet modern expectations. Customers now want coverage that adapts to their financial, health and lifestyle needs. Insurers must go beyond standard policies to cover new risks like climate change and digital security threats. That means providing relevant real-time coverage and better connecting with customers when it matters most.

The need for a life-centric approach

Insurance has traditionally been transactional, focusing on financial compensation after loss. But customers now expect more than just a reactive safety net. They want proactive risk prevention, personalised coverage and seamless digital experiences. A life-centric approach meets these expectations, shifting insurance from simple payouts to ongoing support for evolving lifestyles.

This model moves beyond strict policy. The goal is to create flexible solutions that align with individual needs, whether in health, home, motor or life insurance. By offering tailored services and proactive engagement, insurers can provide real value at every customer journey stage.

Behaviour and usage-based insurance

One of the best innovations in life-centric insurance is the rise of behaviour-based and usage-based insurance models. These policies adjust premiums based on real-time data from telematics, wearable technology or digital interactions. Vitality is a strong example, rewarding policyholders for healthy habits with lower premiums and incentives based on fitness activity, nutrition tracking and preventive care.

UK-based auto insurers like By Miles take a similar approach, using telematics to assess driver behaviours and offer dynamic pricing and personalised coverage based on mileage, speed and braking patterns. This data-driven approach ensures fairer pricing, encourages safer driving, and benefits both policyholders and insurers by reducing claims and improving road safety.

Embedded insurance and digital ecosystem

Embedded insurance is making coverage more accessible by integrating it directly into everyday purchases and services. Insurance is built into transactions instead of requiring customers to seek out policies separately. Zego, for instance, provides flexible, on-demand coverage for gig economy workers in the UK, ensuring drivers for companies like Uber and Deliveroo are protected. Insurers are also working with digital platforms, from e-commerce to travel providers. Tesco Bank, for example,  embeds insurance into its retail and financial products.

Life-centric insurance goes beyond policy issuance, embedding coverage into daily life to support better risk management. This strengthens relationships between insurers and customers, ensuring relevant and timely support. Flood Re, a UK government-backed initiative, works with insurers to make flood insurance more accessible and affordable so that homes in high-risk areas remain protected.

Proactive management

The shift towards life-centricity also bleeds into health and life insurance, moving beyond passive claims processing to proactive wellness management. Bupa UK, for example, has integrated insurance with digital healthcare services, offering policyholders access to virtual GP consultations, mental health support and preventive wellness programmes. This approach ensures customers receive ongoing care rather than just financial assistance after a health event.

Regulatory compliance remains a big challenge in adopting a life-centric model. As rules around fair pricing and responsible AI usage change, insurers must adapt. The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) continually assess how insurers use AI and big data in underwriting, requiring firms to prove fairness and accountability in their decision-making.

Education and trust are key to the adoption of life-centric insurance. Many consumers are unaware of models like usage-based insurance, making it essential for insurers to invest in clear, accessible communication. Insurers can build confidence and encourage wider adoption by helping customers understand new approaches and benefits of digital-first services.

Life-centricity is reshaping the insurance industry by embedding coverage into everyday experiences, offering personalised pricing and proactively managing risk. The insurers that succeed will be those that focus on engagement, leveraging tech for hyper-personalised policies and building trust.

Integrations will define the future of insurance. UK consumers increasingly expect insurers to be ongoing partners rather than just claim processors. As a result, insurers that implement real-time responsiveness and a commitment to customer support will maintain a competitive edge.