Library: IIR – World in flux: Can insurance fill the stability gap in 2022?

Executive summary :

Stability, for customers, is about seeing into the future and anticipating where issues might crop up that would adversely impact their lives.

Insurance needs to fill the instability gaps

Let’s try some word association. Maybe we could begin with the word “change.” What does the word change mean to you? You can tell a lot about people (and about companies) by their responses to the concept of change. Does change cause excitement or dread or both? Of course, much of this depends upon what is changing. Do we have reason to be excited? Can we embrace a little of the unknown to grab hold of the positive side of change?

Insurers need innovations

For our customers, change often means instability. Instability is a threat to families, businesses, employers of all sizes and all of the organisations that insurers serve. Insurance needs to fill the stability gaps by adapting itself to grow new foundations to mitigate risk and support stable lives and businesses. When insurers adapt to a rapidly changing world, they are the ones who even out the risks and normalise life and work.

Insurance’s opportunities have always circled around risk and instability because long-term stability is a necessity. Modern challenges, however, require today’s innovations and technologies to create products and services that engender new areas to manage risk. Yesterday’s insurance products couldn’t anticipate cyberattacks, pandemic loss, climate change, and new lifestyles.

As risk changes, one thing that never changes is a person’s or business’ need to have security and stability. Risk avoidance and control over the future is a visceral motivator. There is almost no stress as debilitating as risk, uncertainty and lack of stability. So, Majesco has sought to find out how today’s and tomorrow’s customer lifestyles and business changes will impact both the perceived need for insurance (by customers) and the perceived types of products and services supplied (by insurers). Are these aligned?

If today’s market trends are any indicator, the level of change has never been greater, and insurance’s opportunities have never been more numerous. People and businesses need insurance and they can look at the world right now and see every motivation to protect their interests.

Last week, Majesco released its 2022 Consumer Report, Your Insurance Customers: A Crystal Ball of Big Changes in a Small Window of Time. The report is both an overview of real insurance trends, as captured by our customer survey, and an analysis of what those trends mean to insurer adaptability and overall opportunity. If you’re looking for insights and specific trends that will impact your organization today and tomorrow, be sure to download the full report. In this article, we’re going to look at two related segments of the report: individual and family changes that are impacting life and health insurance and numerous demographic trends that will impact life, health and voluntary benefits.

Family changes will boost life and health products

Insurers have commonly looked at the points of family change for opportunities to sell insurance. Today, however, insurers have the opportunity to improve products and placement. In the Majesco report, Gen Z & Millennials’ have high expectations that their families will change in the near future. This undoubtedly helped raise the importance of insurance to them, with 25% planning to have children and 22 percent expecting to be caring for an aging parent or relative (Figure 1).  Furthermore, 15 percent expect to get married. Among the older Gen Z and Millennials, 14 percent expect to have a child in college or tech school, reflecting the transition into later family life stage changes, and subsequently the opportunity for insurers to offer life and health insurance, both as individual and as voluntary benefits.

In contrast, the older generation is entering their later life stages with retirement and will focus on maximising their income through life, annuity and other investments as well as retaining coverages they want once they leave full-time employment. The ability for insurers to help them retain their money and manage their income, while also providing insurance to manage the increasing risk of age, is becoming a significant market opportunity that will require new products, services and partnerships to deliver.

See the full report for more…

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