Capgemini – Life Insurance Top Trends 2021
Executive summary :
Miles to go before I sleep…
COVID-19 continues to have a serious impact on the life insurance industry. Job losses, defunct traditional channels, and lack of real-time response have significantly affected the entire customer life cycle from acquisition to retention. Prolonged lockdowns and social distancing norms have impacted customer service as well. The low-interest-rate environment has also had a major impact on insurance firm profits. At the same time, interest in life insurance policies has grown significantly during this same period.
Insurers face three critical questions during today’s challenging times: How do we generate demand and attract customers, how do we improve customer retention, and how can we make underwriting more profitable?
Looking for flexible products
Looking back at Capgemini’s Top Trends in Life Insurance: 2020 findings (published Q4 2019), wherein we identified innovative products for evolving risk scenarios, explored ways to improve operational efficiency, discussed being both a partner and a preventer – and offered a rationale for close collaboration with ecosystem partners.
Much of what we said last year holds true today. A trend that is gaining traction lately is the hunt for flexible products. Life insurers find themselves grappling with different product needs of aging boomers and emerging millennial and Gen Z populations.
This year main trend is about the growing need for operational efficiency as life insurers seek to minimise losses and expenses and drive underwriting profitability.
Looking at the glass half full, life insurers are enthusiastically adopting technologies. As they seek to enhance operational efficiency, digital tools and techniques are becoming their enablers for operational efficiency and business continuity. They are also working to provide omnichannel experiences as customers purchase policies or seek post-purchase service. Many insurers are reinventing themselves to innovatively engage with customers to reduce policy lapses and improve customer retention.
Insurers are modernising their platforms
To become winners of the future, life insurers are embarking on long-overdue legacy platform modernisation efforts to gain agility and respond quickly to shifting market dynamics.
With a ticking clock and constrained budgets, the focus is on collaboration and co-innovation. Successful life insurers today are collaborating at scale with ecosystem partners such as insurtechs and technology providers to acquire business-critical capabilities to maximise new normal operational conditions.
Becoming an inventive insurer – acquiring competencies across dimensions of customer centricity, product agility, intelligent processes, and an open ecosystem – will boost life insurers’ relevance and long-term profitability.
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