Global consultancy firm reveals top 10 technology trends in life space for 2018
The idea that life insurers are reluctant to embrace change is, in itself, outdated. That’s the view of industry expert Chad Hersh, who points to the significant progress being made in the burgeoning insurtech space. As vice-president, L&A Insurance and Group Benefits, North America, at global consultancy firm Capgemini, he has observed insurance providers’ growing commitment to new digital technologies. In his opinion, it is a direct response to the expectations of consumers, particularly when it comes to engagement.
“If you think about the typical life insurance policy holder, they are traditionally not very engaged with their insurer,” says Hersh. “The insurer tends to have very little activity with the insured, so there’s not much opportunity to cross-sell or maintain any sort of loyalty. For some products, that’s a real problem – term-life insurance for example.”
Advancements in technology mean that need not be the case in 2018, with various programs now connecting consumers with their providers. In Canada, the Big Three of Manulife, Sun Life and Great-West Life have been early adopters of the concept of gamification, which is becoming the industry standard, explains Hersh.
“What insurers are starting to realize is that there are ways to engage with customers that don’t necessarily have anything to do with selling them anything,” he says. “They can engage with things like wearable devices, and things like offering a discount for each month they meet fitness goals. You can further gamify that by opening it up to a community.”
He adds: “A company like Life.io, they have created communities around these fitness deals where you have things like weight-loss challenges or running challenges. That kind of stuff can be used to gamify behaviors that are very good for the insurer.”
Artificial intelligence is another new frontier for insurance companies and one with game-changing capability. Companies have really only started to scratch the surface when it comes to AI, and the rewards will be considerable for those that can utilize it best over the coming decades, believes Hersh.
“Some of these companies are doing a much better job of figuring out when life events occur, and even proactively predicting when life events will occur,” he says. “So if someone is getting married, or having a kid, it’s a good time to have life insurance. If you are 20 years out from retirement, an annuity might make sense. If you can proactively know about these life events, it’s a great way to create new revenue streams.”
2. Insurers redefine customer engagement metrics via wearables and other sensor-based devices
3. Robo advisors supplement customer support with convenient, anytime life insurance advice
4. More and more, insurers automate core processes through technologies such as Robotic Process Automation (RPA) and Artificial Intelligence
5. Blockchain-based smart contracts may be a game changer for processing claims and improving transparency
6. Predictive and behavioral analytics enable better understanding of customer needs for greater personalization closed-book optimization
7. Advanced analytics tools enable better fraud detection and prevention – boost business profits
8. Insurtech capabilities enable new life insurance revenue streams and markets by designing personalized and granular products
9. Life insurers explore Insurtech approaches such as partnerships and incubators to gain agility and expand customer service capabilities
10. Increasingly, life insurers are leveraging the cloud for better agility and scalability in deploying new offerings
