Picture this: the year is 2030 and demand for mortality protection is at an all-time high. A combination of factors, namely the COVID-19 pandemic, rising healthcare costs and an expanding global middle class, have strengthened customer demand for life insurance. Amongst many other technological advancements in the world, the insurance industry has transformed into a client-centric, highly automated, data-driven machine
Flashback to the year 2023, where insurance firms face a pivotal opportunity to set themselves up for success. Providing superior customer experience is at the forefront of all decisions. Insurers are focused on modernizing policy administration systems and moving beyond legacy technology. Insurance firms are looking to fulfill growing customer demands while increasing profitability and growth.
How can the insurer of 2023 prepare for the customer of 2030? What does the future of the life insurance industry look like and what will the customers of 2030 be looking for in the next decade?
1. Personalized solutions #
The current business model makes it difficult for a life insurer to engage with their customers. Life insurance policies don't require clients to check on them daily like bank accounts, so there's fewer opportunities to interact with customers and build engagement. However, engaging with customers increases retention and creates upselling opportunities. One of the ways stronger customer relationships can be built is through providing access to health data and personalized product offerings.
The growth of connected devices, wearables and access to health data will play a large role in the personalization of life insurance offerings in the next ten years. As life expectancy continues to increase and people continue to become more health conscious, access to health data will make it easier for insurers to interact with customers regarding their well-being and adjust premiums accordingly. Customers will not only hear from their insurance provider when a death occurs. Rather, the insurer will play an active role in providing personalized reminders surrounding health-care management, diet, and lifestyle. This ongoing engagement will benefit both the insurer and insured.
2. Superior customer experience #
Customers are already accustomed to seamless digital customer experience in every other industry. Insurers understand the importance of delivering those same types of experiences but are challenged by the reality that they are not ‘born-digital’ companies like Amazon or Netflix. They are often more than a hundred years old and managing policies on decades old core systems that are neither flexible nor capable of sharing data with modern CX solutions in real time.
While big bang transformations can be daunting, the need for modernization is inescapable.
For insurers who haven’t yet started their digital transformation journey, it’s important to think from the outside-in when planning. While streamlining internal processes will be necessary eventually, priority should be placed on applications that will enhance customer experience. This means solutions and integrated technology that customers can see and use. More and more, CIOs and CCOs are asking, what can we do to modernize our businesses from customer’s POV?
For example, modernizing the underwriting process makes a tremendous difference in elevating the customer experience. Currently, a lot of insurers have accelerated underwriting with electronic applications. However, the process is not completely digital and often ends up requiring doctor’s visits, physical signatures, and scanned documents. These manual, analog steps slow the process, create frustration and even if the applicant is approved do not create the kind of first impression that is a good foundation for client engagement.
Creating a superior customer experience in the next decade will entail streamlining underwriting even more. With access to a plethora of health and lifestyle data through connected devices, and continuous developments in healthcare and technology, the next decade will see one-touch, non-intrusive underwriting.
3. The integration of physical and digital channels #
It’s important for insurers to find the balance between human intervention and technology. This applies to both internal processes and from a customer experience POV.
From an internal standpoint, integration means digitalizing the right processes to empower employees. Even a decade from now, professionals will play a critical role in the industry. In order to get to a point where their skills are being fully utilized, insurers need to invest in the right technology that will eliminate administrative, repetitive tasks. This will allow these professionals to leave behind low-value activities like data entry and focus on value-added tasks such as providing service and advice to prospects and clients.
Insurers also need to find the right balance between physical and digital interactions to create a seamless customer journey. Some interactions are low effort - low engagement and so they should be digitized and automated where possible. But more complex tasks, that require emotional engagement (such as complicated insurance + retirement planning or death benefit claims) are greatly enhanced by an advisor's ability to empathize and guide a client through a difficult time.
Conclusion #
The life insurance industry is headed in the right direction and catching up with the digital trailblazers in other industries. While insurers still have a way to go, it’s important to start modernizing today in order to keep up with upcoming life insurance trends and customer expectations. Where to start? Upgrading legacy systems, adopting eApps and accelerating underwriting will help insurers of today keep up with customer expectations as they continue to rise.
