The life insurance and annuity industry proved to be resilient in 2021, even before covid-19 and the delta variant. I am encouraged by the fantastic scientific breakthroughs that have created and distributed new vaccines so widely, and I look forward to a much brighter 2022. I am also optimistic about the future of our industry. I believe that the digital transformation will accelerate in the coming year and we will see technology and human ingenuity work together to deliver insurance innovation.
When it comes to life insurance guarantees, it is the insurers themselves who are the heart of human ingenuity. They are optimistic about their future and they embrace change. A survey by Accenture Research with over 500 insurers showed that insurers remain optimistic despite the pace of change in their field. They are also enthusiastic about technological advances in underwriting and their organizations̵7; use of these advances. The full results of the study are coming soon, but you can get an early look here.
Our forecasts for 2022 reflect this optimism as we strive for bold new advances in underwriting – advances that insurers welcome and that technology enables.
1. Underwriting will be at the center of the conversation with the customer experience
The customer experience will determine who wins the digital war over new companies and staff talents. People from all demographics are increasingly comfortable doing business digitally. This trend is expected to continue as AI, data analysis and cognitive insurance platforms simplify and improve the customer experience for everyone. Today’s insurance customers expect a friction – free experience at the moment; they want self-service, but are open to advice when needed. The same goes for the staff’s talent pool. Workers expect a friction-free experience, whether they are customer-oriented or in back office. The technology they use must enable them to provide a truly improved and reworked insurance experience, not just incremental “business as usual” improvements.
2. AI-led underwriting leaders will pull out of the herd
Insurance companies that continue to invest in artificial intelligence (AI) will become even more competitive. Sixty-two percent of insurance companies invest in AI and almost half believe it will be crucial for business development over the next three years, according to GlobalData Emerging Technology Trends Survey 2020. Some insurance companies already use AI to leverage the vast amounts of data now available to them from various sources, such as the health and wellness sector. With the help of AI-processed data, insurance companies can get more accurate risk assessments and deeper insights about their consumers. These insights can then drive new differentiated product and service innovations to the market, aimed at digitally savvy, online insurance consumers. But to get there, insurance companies need to invest in digital core technology that enables them to connect to new third-generation insurance platforms that benefit from AI and automation. Overall, investments in AI will generate business growth through a better experience for insurers, agents and consumers
3. Underwriting will contribute to the insurance companies’ ESG program
Environment, Sustainability and Governance (ESG) is now mainstream and companies investing in ESG enjoy both economic and societal benefits. Accenture, in collaboration with the World Economic Forum, found that organizations with deeply rooted sustainability management methods surpass peers by 21 percent both in terms of profitability and positive environmental and societal results. A separate study by the US SIF Foundation found that as of 2020, ESG assets account for 1/3 of the total US assets under professional management.
Life insurance companies have a role to play here, especially with the convergence of health and prosperity underway in our industry. Underwriting technology has the power and promise to offer coverage to traditionally underserved and underinsured socio-economic segments. Through the ethical use of AI and transparent, open-minded predictive modeling, emissions guarantees can play a key role in helping the industry function sustainably and fairly.
Finally, there is cloud technology, which helps companies from all industries to function more sustainably by reducing both carbon dioxide emissions and costs. The cloud also provides guarantors with the computing power needed to take advantage of the advances in data analytics needed to process the explosion in data sources.
I am also full of optimism when I see progress in our industry through technology and human ingenuity. Let’s talk about achieving your future initiatives and discuss our soon to be published insurance analysis.
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Disclaimer: This content is provided for general information purposes only and is not intended to be used in consultation with our professional advisors.