3 min read
In the span of the last few years, you would’ve seen and felt the same thing that we did.
We are talking about the struggle of the life insurance industry.
In Europe, the industry is rapidly declining despite life insurance being one of the oldest financial products. A lot of life insurers in Britain that were in business 15 years ago no longer exist. [1]
Elsewhere around the globe, too, things aren’t very bright. Life insurers in China are struggling as premiums plummet. [2] In the US, the same decline of life insurance is shrouded in mystery. 27 million policies were bought in 1965. Same as in 2016. In this span, the population had increased by 50%! [3] Yet, policy purchase has not gone up.
In last week’s post, we explored what might be leading to this decline. Primary factors include the emergence of new technologies, changing customer expectations, and people’s money situation. The lengthy and inconvenient underwriting process also acts as a huge deterrent.
Shifting gears this week, let’s explore how the struggling life insurance industry can be stabilised and strengthened.
After the industrial revolution, we are now living in the technological revolution.
The birth of companies like Google, Amazon, and Apple have influenced customer expectations at a global level. Ease, convenience, and speed are the norms. Any company not keeping up with them is bound to fall back.
The insurance industry is, thus, facing increased and different expectations from its customers. Customers will only engage in conversation and business subject to certain conditions being met. In almost all cases, these are ease, convenience, and speed.
Technology has also shifted what needs to be protected and how it needs to be protected.
We keep bringing up the conversation of technology because, in today’s era, it is truly crucial to the success of a business.
But, if you are just catching up, where to start? How to integrate technology into an old business model? The business model will be overhauled because technology changes things from the ground up. So, where to begin?
We give you a simple roadmap:
This is our modus operandi when working with clients as well. We begin from the end.
We decide the cake we want to make and then look up a recipe. We visualize the type of house we want and then call in an architect to draw up a blueprint. The final goal needs to be clarified for the process to begin.
So, begin by envisioning what kind of services do you want to provide? Which opportunities do you want to take advantage of? What kind of clients do you want?
Determine these things and then work backwards from there to decide which technology would be most helpful to reach those goals.
As a digitized insurance company, what position will you take in the insurance ecosystem? What will your own internal ecosystem look like once the technological changes land?
Use this envisioning exercise to plan your present and bring in the appropriate technologies/ support now.
For example, maybe you would like to increase customer engagement. Could you bring in better and instantaneous communication channels for that? Or maybe you would like to gain a competitive advantage over your competitors in your niche? Then analyse their structuring and workings. What do you think they could do better? What doesn’t seem to be working for them? Then implement the answers and solutions in your organisation.
Technology basics or rather SMAC- social, mobile, analytics, cloud- serve as the basis of the technological customer service era.
As a digitized insurance company, you need to master these core technological competencies for long-term success since all of them serve a different purpose. Spixii’s chatbot solutions help you to master the analytics and cloud portion while being responsive on all devices including mobiles and tablets.
Technology has saved the day and changed lives in so many realms. Even the simple act of reading these words on a screen is a revolution. So why is there a delay in unleashing the same revolution in the life insurance industry?
We are at a point where not keeping up with the times will mean extinction. Additionally, in reality, the cost of being alive is a lot lesser than the price of dying.
[1] The Economist
[2] Financial Times
[3] Bloomberg