Pandemic reveals three key areas for life insurance companies to focus on in future
Embracing digital innovation will be essential to the future of work.
Although the pandemic prompted life insurance companies to accelerate their digital adoption to ensure continuity of business and serve their customers, it also exposed the challenges of legacy systems, siloed operations and the continued need to modernize.
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The latest C-suite life insurance executive survey by LIMRA and Boston Consulting Group found three priorities for the industry:
- Modernize technology
- Embrace the future of work
- Pursue new areas of growth
“In our survey and discussions, life insurance executives around the world emphasized that their companies need to adapt to high expectations of customers, advisors and employees in the post-pandemic world,” according to the survey report. “Each carrier that we spoke with described opportunities to build on successes or in many cases, expand efforts to transform.” The survey results provide a roadmap to pursue these objectives:
Technology
Nearly four in 10 executives said technology was their company’s greatest internal challenge, twice as many as in 2019 when the survey was last conducted. Executives surveyed said digital automation and data science and analytics were the top technologies needed to ensure their companies’ progress in marketing, distribution and customer experience over the next five years. Six in 10 said investments in customer service technologies, modernizing legacy systems and mitigating cybersecurity threats would be crucial to being competitive.
Future of work
In addition to introducing the need for remote and hybrid work arrangements, COVID-19 also highlighted the need to adapt to the ever-growing, digitally based customer engagement. Two-thirds of executives surveyed said embracing digital innovation would be most important to the future of work in the industry. This workforce transformation will require meaningful changes in how employees are managed. Sixty percent of executives said the biggest challenges associated with change management will be cultural.
Growth
Insurers should not only expand into new models that bring life insurance to customers where they bank, shop, work or travel but they also must reimagine how advisors interact with customers and provide them the training and digital tools needed to support this. Although persistent ultra-low interest rates have required life insurers to shift their portfolio to products that require less capital and minimize risk, companies should develop personalized solutions that add value in a customer’s daily life, creating greater loyalty and new opportunities.
Insurers are exploring new customer engagement approaches to tap into growth opportunities. From health and well-being products to rewards programs, worksite well-being programs, voluntary benefits and use of social media, companies can leverage these new strategies to capture more data, learn about customer preferences and refine their offerings.
“The pace of change has accelerated in our industry and across the world, requiring life insurers to adjust their strategies to not only to meet current demands of today’s customers but also to ensure competitiveness in the decades to come,” said Alison Salka, Ph.D., senior vice president and director of LIMRA Research.
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