Human interaction still worth the cost – Gallagher’s Stephen Rhee

The insurance industry has undergone digital transformation over the past decade and, while finding the right balance between automation and human interaction remains a challenge, that human interaction is still worth the outlay.

Speaking at the recent Insurtech Insights conference (20 March 2025), Gallagher’s global chief digital officer Stephen Rhee and Dan King, co-founder at Insurance DataLab, explored how insurers and brokers could leverage technology without losing the personal connections that underpin trust in the sector.

Rhee highlighted how customer expectations for digital and human journeys have changed across different market segments.

He said: “If you think about your own personal insurance, we’re all highly digital – meaning customers want self-service and ease of payment.

“Small commercial is similar. These ‘chief everything officers’ are doing everything from HR to finance, so the last thing they want to work on is insurance – they want it to be accessible for them.”

However, as businesses grow, their needs shift.

Rhee added: “Mid-market clients want digital tools, but they also want to talk to a broker – an expert that can validate their purchase. ‘Am I buying the right amount? Do I have the right insurer?’.

“Then you get large commercial, which is currently around 25% digital and 75% relationship-based, but that is shifting rapidly towards 50-50. These clients want to share information across their teams and brokers.”

Over-digitalisation danger

Artificial intelligence (AI) was a major theme at the Insurtech Insights conference, with Rhee keen to differentiate AI’s impact from previous technological trends.

He explained: “I don’t think AI is on the same path as blockchain. AI is already embedded in our [industry’s] interactions.”

And, although Rhee said AI is improving underwriting for insurers and removing pain points for brokers, he noted that an over-reliance on digital tools can have a negative impact.

He explained: “We’ve all had negative experiences with chatbots. Some companies see automation purely as a cost-saving measure but, in insurance, you can’t be too digital – you need an omnichannel experience.”

Rhee also cited a Harvard University study showing that live interactions cost around $8 per interaction, compared to just cents for automated responses.

He added: “Economically, it makes sense to push interactions to a bot, but from a retention standpoint, you can be too digital.

“The reality is, for $8, I’ll take that risk and have an interaction. The cost of an search engine optimisation (SEO) lead is $30 – that’s the cost to replace that client, so you have to look at the total cycle.”

The key to digital transformation lies in understanding when human interaction is necessary, he explained, sharing an example from a recent Uber ride of his. 

He noted: “I was stuck in traffic for 10 minutes, and Uber messaged me saying ‘are you okay?’ That’s proactive engagement.

“The best firms recognise when customers are stuck on a page and ask ‘can I call you?’ That simple act dramatically improves conversion rates.”

For insurers and brokers, the first step in balancing digital tools with the human touch is mapping the customer journey.

“It’s about understanding your clients,” Rhee said.

“Different segments have different expectations – personal lines and small commercial expect 95% digital, while mid-market has different needs.

“People buy from people they like and trust. Technology should enable that interaction while also making the customer journey as seamless as possible.”