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September 25, 2023 at 01:40 AM
What You Need to Know
- The author believes that apps are a big deal.
- He sees consumer confusion about what annuities are.
- He notes that Secure 2.0 can make a 401(k) retirement plan account a defined benefit account.
The high inflation environment has consumers reevaluating their insurance and investments.
As more financial services are transacted online, it gets easier to switch providers.
These circumstances pressure the insurance and annuity industry and their advisors to find new opportunities for revenue generation, customer retention and satisfaction.
Here’s what insurers you work with must keep in mind as they cope with changing times.
1. Process Streamlining
Insurers are replacing legacy systems with rules-based applications and creating simpler products to simplify issue processing, eliminating manual underwriting, and issuing a policy within minutes rather than days.
Our take: companies that successfully reduce costs and increase efficiency will empower their advisors to provide a convenient customer experience.
Insurers are also facing challenges with the claims process; the most popular complaint being “too much paperwork”.
The process is often emotionally charged for customers, making it even more delicate for providers and their advisors.
In the 2023 Capco U.S. Insurance Survey, over 40% of respondents cited convenience, accessibility and user friendliness as key satisfiers when using an insurance company’s app.
This underscores the need for quick, painless interactions.
Our take: insurers can empower their advisors by streamlining processes, and engaging claimants digitally with apps that reduce friction to nurture the customer relationship with their agent and the firm.
2. Data Integration and Personalization
Insurance companies are integrating outside data through third party partnerships.
For example, integrating medical information from other companies can accelerate the underwriting process and cut time to issue.
For risk monitoring after issue, insurance companies can incorporate data from an insured’s wearable fitness tracker.
Insurance companies may even forgo measured data in favor of predictive analytics to measure risk.
Our take: Integrating data will empower agents to provide the seamless experience consumers expect.
3. Education and Building Trust
There is an alarming financial literacy gap, particularly concerning annuities.
In a 2020 LIMRA survey, over 60% of consumers said they wouldn’t buy annuities because they don’t understand them or know which type to buy.
Christopher Boorman is a senior consultant at 