If you are thinking that “what’s next” for the life insurance industry has something to do with the experience around buying and owning life insurance products, think again.
Yes, the life insurance industry has a big opportunity to improve the current state of the customer experience. Companies are improving the complex and inauthentic language used in communications, improving engagement levels with consumers, reducing friction in the underwriting process, and creating the ability to transact in an “omni-channel” way.
We even see new peer-to-peer models cropping up for other insurance lines, and it is just a matter of time before life insurance becomes a focus within them.
I believe the life insurance industry now at least has a handle on what needs to be done to improve the experience. Companies are putting significant effort into catching up to other categories. Some of the progress is coming from within the established carriers, and even more of it is coming from disruptors that are improving the model rapidly, giving established carriers new capability to buy instead of building.
So the industry is just a short time away from meeting the demands of today’s consumer. Bravo!
Now, what’s next?
Well here it is…ready? Death just isn’t what it used to be.
Social, scientific and technological advances have dramatically reduced the probability of death for those under the age of 55. This is the group of people whose untimely death would cause the greatest financial burden on families and businesses, and the group that we depict as needing life insurance most.
Granted, many life insurance policies sold are issued on older people to implement tax strategies. However, the original intent of the insurance industry is to protect families and businesses from becoming destitute as a result of the loss of a breadwinner or key person.
What happens if that probability is significantly reduced? Do we continue to try and find more “death pool” needs. Or do we find new needs that our unique skills and competencies can solve?
What’s next, in my opinion, lies in the latter. We can define our business more broadly. Are we in the business of insuring lives, or “assuring” them? In other words, assuring that someone will live longer by avoiding or recovering from the things that are likely to cause death.
The biggest offenders are accidents, intended or unintended death by self or other inflicted means (drug use, suicide, etc.), and cancer. So what does that mean for “next” in the insurance industry?
First, let’s examine avoidance. Could life insurers use technology and probability to help individuals and communities further reduce the likelihood of accidents? We need to go beyond driving and household safety tips and into true early warning systems or algorithms that can enable a consumer to be proactive.
Could we better predict the likelihood of suicides or accidental drug overdoses? Could we also help people understand the role of new, emerging risks such as “hackccidents”? This is my term for an accident that is a result of human intervention into a computer system that may be controlling my car, my train, my plane or some other technology.
Secondly, let’s examine recovery. Suppose someone actually has an incident and now death is imminent. Could the life insurance industry guarantee access to the latest technology? Could we design investment futures (similar to investments in gold or pork belly futures) in the ability to get an organ transplant, expensive medicine or to be frozen until the cure arrives?
This may all sound far-fetched, but how far-fetched did the innovations of today sound just 10 years ago? Hmmm.
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