Malaysian insurers race to fix customer journeys

Empathy and transparency are becoming competitive advantages.

Malaysian insurers are under pressure to simplify customer communications and modernise payment systems as policyholders increasingly compare their insurance experience with digital services offered by banks, e-commerce platforms and ride-hailing apps.

“The biggest failure we see is uncertainty,” Clinton Brown, general manager for the Asia-Pacific region at Smart Communications LLC, told Insurance Asia.

“When a customer is in a moment that matters—a claim after a storm, some sort of significant policy change, maybe their family dynamic has changed, or even if it’s just a service issue—they always want to know what’s happening, what’s happening next, and what they need to do,” he said.

Smart Communications' 2026 Customer Experience Benchmark found that 63% of consumers worldwide would switch insurers if communications failed to meet their expectations.

Only half rated insurers' communications as good or excellent, citing unclear messages, complex forms, and poor coordination across communication channels.

Brown said improving communications reduces customer service costs and boosts compliance.

“A clearer claim update process reduces call volumes,” he said. “If you have an increase in customer confidence, and maybe you've got lower operational effort to make those changes, you're reducing your compliance risk at the same time as reducing that call volume.”

Soon Yean Lee, country manager for Malaysia at Adyen N.V., said insurers also need better payment infrastructure as customers expect the same seamless experience offered by digital platforms.

“When transaction data is not connected to daily operations in real time, companies cannot see exactly how much revenue is clear or where payment errors are quietly costing them money,” he said in an emailed reply to questions.

An Adyen report published in May found that 67% of Malaysian insurers are digitalising and streamlining payment systems, whilst 69% are automating payment-related processes.

Lee said recurring premium collections remain difficult because insurers often learn about failed payments only after receiving batch updates from banks, with limited information on why transactions were declined.

“A payment partner can support that transition by reducing manual work, improving visibility across payments and strengthening fraud controls without requiring a complete overhaul from day one,” he said.

Claims remain the defining customer experience, according to Ally Robertson, country chief operations officer for Malaysia at Zurich Insurance Group Ltd.

“Claims are where customers really experience the value of insurance, and it is usually at a time when they are already dealing with stress, uncertainty or disruption in their lives,” he said in an email. “We have to recognise that many customers are not only seeking a claim outcome, but also reassurance and empathy.”

He said policy wording and claim procedures that seem routine to insurers could overwhelm customers navigating the process for the first time.

Zurich is addressing this through employee training, empathy programmes, and technology that gives agents a more complete view of customers.

A Howden Group report published in May found that 64% of workers across Asia trust AI for diagnosis, treatment, and claims, whilst 38% said AI has already been part of their healthcare experience.

Lee said payment modernisation is ultimately about protecting recurring premium income rather than simply reducing costs.

“The financial impact of manual processing generally shows up in two main ways: revenue lost from involuntary churn and difficulties in managing daily cash flow,” he said.

“Modernising this framework is less about cutting down staff hours and more about giving insurers real-time insight into their payment performance so they can protect their recurring premium revenue,” he added.