(Photo credit: Anthony R. O’Donnell.)
Welcome to the second issue of Insurance Innovation Reporter. In this issue we present feature stories, company profiles and industry commentary on technologies and business strategies that are reshaping the new business process in the life & annuities business. We also introduce Carol O’Biso, IIR’s new staff contributor, author of our cover story, New Lease on Life: How a Technology Renaissance is Boosting the Sale of Life Insurance and Annuities.
Life insurance remains among the most undersold types of insurance. It may not be surprising that life insurance lags behind essentially compulsory P&C products, such as auto and homeowners’ policies, but in recent times life insurance has been falling below its own past performance. LIMRA’s latest research shows that the proportion of U.S. adults with life insurance has declined to an all-time low, with 41 percent having no life insurance at all. Of those who have coverage, it’s likely to be employee provided – a category that correlates to the lowest average amount of coverage. Only 44 percent of U.S. households have individual life insurance, which LIMRA says is a 50-year low. In fact, according to LIMRA, the likelihood of being without life insurance has dramatically increased for every age group since 2004.
For those who sell life insurance and related products this is a discouraging trend. Not only is life insurance not bought, as the old saying goes, but it’s sold less than it used to be. Is there any room for optimism?
Well, the current situation presents the opportunity of an untapped market, as well as a less dire competitive prospect than the zero-sum game of personal lines P&C. But perhaps the best argument for optimism is the potential of emerging technology. Insurers in all industry segments are threatened by changes in the behavior and expectations of customers, but the technological developments driving that cultural change actually may be favorable for life and annuity sales.
Over the last few years, insurers have begun to implement technologies such as e-signature, e-application and automated underwriting to speed the new business process. By doing so they are not only meeting the expectations of customers, they are increasing the probability that a sale will be concluded and that an agent or advisor’s effort will not have been for naught.
This issue of IIR is replete with new and recent content that details how life and annuity companies are utilizing the latest technology for the creation and illustration of a new generation of products, and how they are enabling speedy transactions based on an improved user experience for both distributor and customer.
In the table of contents below, you’ll find new stories, followed by links to recent IIR content about how insurers are using technology to improve the sales process and other critical processes driving successful life and annuities business.
Life & Annuity companies need to rebound after the 2008 financial crisis; they’re doing so with help from technology-driven product development and illustration, and new business technologies including e-application, automated underwriting and e-signature.
Genworth life insurance CIO Mike Shadler and operations SVP Chris Olson talk about IT’s central role in the business, the company’s use of e-signature, e-application and automated underwriting, and how Genworth sees competitive advantage in data management, now and in the future.
Mike Plazony recalls the era of debit agency life insurance sales and talks about how Erie Family Life Insurance Company is using technology and product innovation to leverage existing strong relationships with auto, home and business clients.
Jim Ferrell comments on V 2.3’s disconnected functionality, new security features and advanced e-signature functionality, in the context of demand-driven innovation in the life & annuities industry.
We are dealing with a new life insurance customer, unlike any before, and differentiation and “survivability” in the future will be linked directly to the use of innovative technologies that simplify, streamline, and improve the user and buyer experience.
An Allianz survey shows that people will pay for additional life insurance benefits if asked more directly. That’s more likely to happen once insurers develop a better user experience and begin acting more like risk mitigation advisors to their policyholders.
P&C carriers are generally ahead of life insurers in recognizing the power of billing as well as the power of “loyalty” selling, but it doesn’t need to be that way. Let’s look at six reasons that you should consider billing as a strategic market tool.
Shifting demands on the part of annuity professionals and their customers require responsive changes in carrier technology supporting both distribution channels and back-end systems.
John Presch, CIO, The Phoenix Companies, discusses the market forces and technology improvements driving increased adoption of e-app, e-signature, automated underwriting and other improvements in life insurance distribution.
The insurer’s new management philosophy, in concert with an aggressive technology strategy featuring cloud delivery of core systems functionality, has turned the 57-year-old company into a high-performance, sales-oriented culture driving efficiency, retention and rapid growth.