InsurTech Part 6: InsurTech in Life & Annuity
Mark Breading, partner at Strategy Meets Action, and Charlie Hanna, director of Hyland Software’s Domestic Insurance Solutions Group, discuss the impact of InsurTech on Life & Annuity insurers.
Analyst Interview: InsurTech in the Life and Annuity Space
Let’s take a moment and talk about what the InsurTech movement in digital transformation means for the life and annuity space. Often, categorized in the same bucket but as you and I both know, very different as far as the way the business is and the way they approach technology. Could you share your view on where you think they are in this process?
Sure. So, I think you know P&C companies and life companies are on different journeys just because of the different nature of their business, but both are going full-bore towards becoming digital insurers. The research we have this year, 91% of life insurers said we have a comprehensive digital strategy at the C-level to become digital over a number of years and they’re investing hundreds of millions of dollars. It’s a big initiative, a big effort.
What I think is so interesting about life companies is the focus primarily is on customer acquisition. Again, it’s not that service is not important. Certainly that claims touch point is highly important, but there are so many new opportunities out there for life companies to grow by reaching new segments, becoming more digital on the front end in the way that they work with advisors and broker dealers and all the distribution network they have.
There’s a lot of opportunities to streamline that, to draw new prospects and customers in and to get them on the books more quickly because that’s the name of the game in life insurance, continuing to get more insured, more customers on the books.
Maybe you can take a moment and refresh us on just how vastly different it is in the life insurance world to acquire a new customer.
Typically, it can take weeks or months to go through the whole process especially for the more complex projects – the permanent life products, the annuity products sometimes. It takes a while to understand the needs through the need-analysis of the customer and to match those to the right products and to go through the right underwriting in the case of the life side of the business – the new business underwriting process.
Lots of data gets ingested, analyzed and packaged. Lots of paper goes back and forth even today, big packages of paper get overnighted to the prospect to fill out and to sign. So, that’s historical but you can see even in that description how much opportunity there is to go digital to streamline that to make it easier and you can imagine as a new prospect, I want life insurance or I want some wealth management product or something like that, I don’t really want to go through a product project that is processed that is weeks long or months long – I want to get this done quickly.
So, lots of potential opportunity there especially as they’re looking at trying to go after the mid-market segments and other new segments where there’s a lot of growth opportunity for the industry.