In a sector that evolves as quickly as insurance, one of the surest ways to become unprofitable and obsolete is to be out of touch with what’s happening in the industry. That being said, too many insurance carriers are still largely out of step with the forces that are shaping their sector, and even the insurers who know that their industry is in the process of a major upheaval may be hesitant to revisit their business practices. Sometimes it’s an issue of holding on to past glories brought about by a storied company history; other times, it stems from a fear that abandoning legacy systems might bring about more harm than good.
All the same, these are precarious times for life insurers. If you represent a life insurance company, you probably know that you face two extremes: it’s either you become lucrative and grow rapidly in a tech-driven environment, or you’re quickly superseded by your competition. As a stakeholder wishing for the better outcome, it’s necessary for you to be up to date with your industry and to be both responsive and resilient to the challenges presented to you. To that end, here’s a list of five key issues that you need to be aware of as a life insurance provider—plus some helpful tips about how your company can address them.
Enhanced Life Insurance Delivery in the Age of the COVID-19 Pandemic
Perhaps the most glaring of these challenges is the ongoing COVID-19 pandemic. Amidst great endangerment to their health, customers continue to look for excellent life insurance coverage from their providers. It serves both your customers’ and your own interests to continue adjusting to the unique challenges of insurance delivery during a pandemic, which include shifting to predominantly remote services, maximizing limited resources in the face of channel overload, and being more vigilant because of an increased risk of insurance fraud. Knowing that there are tough times ahead, prepare to be the kind of insurance provider that both your customers and your employees can turn to in the midst of a health crisis.
The Need to Transition Out of Unsustainable Legacy Systems
The second major challenge has to do with the use of technology to deliver life insurance services. Many insurers are making the choice to transition out of their cumbersome and outdated legacy systems and move their operations to a dedicated insurance management system. After years or perhaps even decades of operating on a legacy system, it’s understandable for you to fear culture shock or a steep learning curve when adopting a new life insurance solution. But if the workflow silos and inefficiencies of your old system are holding your organization back from growing even further, it may be a good idea for you to follow the trend of exploring new insurance technologies.
The Desire for One-Touch Insurance Experiences
A large chunk of your current market for life insurance comprises young professionals who are well-versed in modern technologies. After growing up in an era of instant transportation booking, instant food and grocery deliveries, instant banking services, and instant customer care, their expectations of the insurance experience may follow a similar standard. Re-engineering your insurance process to be quicker and more efficient, as well as reducing the number of touchpoints to completion, will gain your company some valuable traction among your millennial and Gen Z clientele.
The Clamor for Lightweight Insurance Policies for Every Budget
Another trend that you will likely observe within today’s insurance environment is the call for unbundled insurance products, which are the opposite of the catch-all insurance products of yesteryear. Customers are actively looking for policies that are simpler, more affordable, and more lightweight. It makes sense to cater to these customers and to welcome them into the world of insurance with products that don’t intimidate them. It will be an excellent investment in the long run to upgrade your insurance tech stack so that you can be extra flexible and extra efficient when managing simple, lightweight, and decoupled life insurance policies.
High Demand for Custom-Tailored Insurance Offerings
The last trend you’ll want to pay attention to is customers’ desire to experience a personal touch, even in their insurance experience. Now that costs are rising and personal lifestyles are changing, customers are more discerning about getting insurance. Unlike their parents or grandparents, customers from this new generation may not want to buy life insurance just for the sake of it; they’ll want insurance products that truly cater to their personal needs and that align with their personal milestones at their current life stages. A deep understanding of the people that constitute your current market—as well as a commitment to tailor your life insurance services to their experiences—will put you ahead in the race to be relevant.
Takeaway: What’s Next for Life Insurers?
This is by no means an exhaustive list of the trials that life insurance carriers can expect down the line. Insurance has always been a dynamic and competitive field, and it will continue to be so for the carriers operating today. Ensure longevity and relevance for your insurance organization by keeping the pulse, and by making the necessary adjustments to thrive in the future. In an industry that will continue to experience its fair share of uncertainty, careful analysis of trends and responsive decision-making will pave the way forward.