Better Futures: Insurance panel
What will customers expect from life insurers in the future?
08 Apr 2019 - Estimated reading time: 3 minutes
At our Better Futures conference in February, one of the questions asked was 'what will customers expect from insurers in the future?'.
Our afternoon insurance paneI session focused on how the needs and expectations of customers are changing, how insurers can engage with future generations, and what role InsurTech could play. I was joined by Nick Reilly from Royal London, Martin Windle from AIG Life, and Hymans Robertson’s Richard Purcell.
We set the scene by discussing changing customer needs and expectations in an increasingly short-termist world, agreeing that falling numbers in home ownership and a rise in the need for social care in old age are both reshaping the future of the protection insurance industry.
When asked in a poll, 45% of our audience believed demand for life insurance will decrease over the next 10 years compared to 32% who believe it will stay much the same and 23% who believe it will increase.
Given the slightly pessimistic result of our poll, we went on to share ideas on what could be done to improve engagement with the next generation of life insurance customers. Reflecting on the success of banking start-ups such as Starling and Monzo, we agreed that new brands can have an advantage through their ability to speak to the modern customer without the ‘baggage’ and operational drag associated with established brands.
This led the conversation to insurtech, with a focus on the emergence of new tech start-ups such as yulife and Habito and their scope to disrupt the sector, but particularly around the opportunity for life insurers to partner with them. The general consensus was that insurers who take the opportunity to partner with tech start-ups now may be more likely to succeed and grow their market share in the future, but there is a risk that tech providers are not partnering with insurers early enough in the process. The first step should be understanding the underlying problems that insurers are aiming to address, to ensure that tech solutions are targeting insurers' greatest needs.
Finally, we discussed the role of data and the ethical issues it creates. The growing amount of data is creating a more personalised, better assessment of risk. On the other hand, it is eroding the pooling concept of insurance that the industry is built on. While new data sources from say wearable devices have been used in a positive way to date to encourage healthier lives and widen access, the increasingly personalised assessment of risk could result in more customers being priced out of the insurance market. So while there are some exciting opportunities and new insights to be gained from new data sources, there is a fine line that the industry needs to tread, and there could even be a bigger role for regulation in the future.
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