Accenture: Life insurance is a dying business. Can technology revive it?
Article Synopsis :
This blog looks at what needs to be done to get European consumers buying life insurance. People are not buying it, and this is particularly true for generations Y and Z, who simply don’t value it.
Europe is not alone. China has seen a significant downturn in demand for life insurance. Fewer than half (44%) of US households have individual life policies.
There are exceptions, of course. John Hancock and Vitality have managed to create a policy that appeals to both the young and old. This has been achieved because they have embraced “the new normal”, says the author. And this is exactly what others must do if they are to survive in this new environment.
Technology is not only here, but it’s a part of everything we do. The Accenture Technology Vision for Insurance 2019 survey shows the pace of innovation has accelerated over the past three years.
You can no longer differentiate with digital technology – it’s expected by the consumer – and insurers need to understand their key stakeholders better.
This paper suggests three key goals insurers must embrace:
- Look at the business you want to be, set your goals and then move backwards to determine how you can make it happen.
- What does being post-digital mean for your business? Which ecosystem partners do you need and what is your role within any given ecosystem?
- Technology innovation must become a core competency. If you don’t get to grips with social, mobile, analytics, and cloud (SMAC), insurers will find it near impossible to service clients. SMAC will put insurers in the right place to exploit the next big thing in disruptive tech – distributed ledger, artificial intelligence (AI), extended reality, and quantum computing, summarised as DARQ.
Policies will become increasingly tailored to the individual and interact with them regularly. By integrating Vitality’s behavioural change program into all of its life insurance, John Hancock customers engage with their insurer nearly 600 times a year in exchange for rewards or discounts. The average insurance customer will interact with their insurer once, or perhaps twice in a year.
The benefits are apparent, with Vitality customers having hospitalisation costs almost a third (30%) than the rest of the insured population.
The post-digital era is here now and the opportunities exist for those insurers who are able to take advantage of them.
Digital Insurer's CommentsA useful focus on life insurance, which has had a particularly difficult time in recent years.
Another timely warning that if you want to be here in the future, now is the time to determine your strategy.
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