2016 EY US life-annuity insurance outlook – EY Report
Article Synopsis :
2016 is expected to be a challenging year for the US Life-Annuity market with fundamental changes from rapid technology advances, rising customer expectations and growing competition. The “2016 EY US life-annuity insurance outlook” articulates six strategic imperatives to help business leaders tackle said challenges:
- Increase the pace of business transformation and innovation: Insurers need to rethink their business approach with a focus on innovation; driving innovation with cross-functional teams and sharing information without any silos.
- Reinvent products and services for the new digital consumer: Rising customer service expectations require insurers to provide 24/7 support. Transparency, flexible solutions, and better customer engagement all lead to insurers becoming trusted advisors.
- Adjust distribution strategies for technological and regulatory shifts: The customer demand for omni-channel support requires insurers to adapt to new online formats such as “advisor-less” platforms, the use of robo-advisors, and new fiduciary standards to be compliant with changing regulations.
- Reengineer processes to drive efficiency and market growth: Changing customer and technology landscapes require insurer systems to be agile, regulatory compliant, and capable of analytics and advanced processes, and ‘shaking hands’ with third-parties for cloud and on-demand platforms.
- Bring in the right talent to lead innovation: Innovation requires new talent with fresh ideas. Insurers will have to compete with other industries (and with each other) for top talent, aspiring to workforce diversity marked by a mix of cultural, demographic and psychographic backgrounds.
- Put cyber security high on the corporate agenda: Use of social media, cloud and other digital technologies will expose insurers to increased cyber risks. Insurers have to be cautious and make cyber security a key priority, taking a broad view of potential risks, maintaining data privacy and security and responding to changing data regulations impacting compliance.
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Digital Insurer's CommentsThe good news is US life-annuity insurers enter 2016 in relatively good financial condition. The better news is after years of bolstering their balance sheets many life-annuity firms are in a strong position to invest in the innovations and technologies needed to fuel future growth.
Millennials and mass-affluent consumers, in particular, seek the latest digital tools, They want flexible solutions that go beyond one-size-fits-all product offerings. They want more personalized advice based on more rigorous information.
Advanced analytics, such as predictive models, combined with cloud and on-demand technologies, provide insurers with the unique tools to re-engineer front and back offices. Now is not the time to be timid. It’s time to boldly double down on the technologies that matter to your customers.
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