Five trends that will shape the life insurance industry in 2022
Since the privatization of the insurance industry two decades ago, the fallout of COVID-19 pandemic has possibly been the most epochal for the industry. Adversity has brought out the best in the life the insurance business and created a slew of innovations. For me, these last two years have been an education in resilience, courage, and the ability to forge ahead, undaunted by circumstances.
The need for life insurance has gained significant visibility since the pandemic struck, as the uncertainties of life have become starkly visible. Health and wellbeing of self and loved ones have become a priority, which has made financial protection a crucial task. Quite naturally, protection solutions including life and health insurance have become an essential requirement in every financial portfolio.
The preferred methods of insurance buying are also undergoing changed. Customers are not only comfortable buying digitally, but also interacting digitally with advisors on various platforms. As millennials continue to become a larger part of our economy, this trend is likely to become even stronger, prompting insurers to relook at the customer experience through various distribution channels.
As we move into 2022, life insurers will let customers take the wheel and guide transformation for the post-COVID era. Here are some key trends we expect to emerge in the new year.
Protection will remain a customer priority
The pandemic has brought potential risks to one’s life and income to the fore. Term plans and health insurance plans of various hues will continue to be sought-after as facilitating economic continuity for loved ones and an increasing awareness of the need for basic protection has become a priority for many.
While there was already an increasing awareness and demand for income solutions before 2020, the pandemic has amplified the need for protecting one’s income and create an alternate source. So, life insurers will concentrate their efforts on solutions that address these consumer concerns over income fulfilment and other goal-linked requirements like retirement.
As in many other fields, digital technologies will continue to see significant investments. Life insurers will leverage digital technologies to help customers purchase complex products in a simple way and fulfil service requests in a seamless manner. Accustomed to an e-commerce-like experience online, an efficient onboarding process will be a key expectation of customers from the insurance world. Insurers will therefore invest considerable resources in reimagining the consumer journeys across the lifecycle of a policy. From AI-enabled Chatbots to easy and quick fulfilment of service requests, life insurers will focus on delivering a delightful experience to the customer.
Over the next couple of years, companies will also look at ways to deeply integrate their customer acquisition and service capabilities with that of their distribution partners to deliver a unified experience to the customer. These technology initiatives will be critical to encourage innovation, achieve customer-focused business objectives, and drive future growth.
Investments in Data Science and Analytics will rise
There will be a higher emphasis on building and nurturing data-related technologies – specifically collection, analytics, and protection. Artificial Intelligence and Machine Learning will help get a deeper insight into customer personas and therefore offer newer avenues to cater to their needs. ML will also play an important role in optimizing other processes like risk prevention, customer retention, advisor activation, etc.
Protecting customer information by applying appropriate security measures and access controls to information and application will be among the top technology-led priorities for businesses.
Easing access to insurance
Life insurers will continue building multi-channel capabilities to assist and provide information to the customers, wherever, and however they want. Simply put, easing access to insurance will be an important business objective. Companies will look for newer strategic partnerships to significantly smoothen the life insurance purchase journey for customers. In the years to come, insurers will work consistently to improve the service experience by investing in omni-channel capabilities over time.
Strengthening of the insurance advisory approach
As customers proactively consider life insurance as a means of financial protection, insurers, together with their distribution partners, will adopt an insurance advisory approach. Understanding customer needs and advising them on appropriate solutions to address challenges will become the norm.
In the immediate term, life insurers will continue to seek opportunities to reimagine their product propositions, customer experience, and business strategies to support innovation and faster growth. The creation of digital tools will allow a significant degree of personalization that will help customer both identify and fulfill their unique needs. Sandbox experiments are likely to increase as insurers try out new and innovative products.Overall, 2022 will lead the way in setting out a path of significant investments and innovation across the insurance industry that will play over the next three to five years.