The life insurance industry has become increasingly competitive thanks to persistent low interest rates, greater competition with and for distribution channels, and significant demographic shifts. All three of these areas create challenges that insurers must address to maintain or improve their market position. Many life insurance carriers are also contending with legacy systems that limit their flexibility and impede the speed needed to compete for a new generation of connected consumers and producers.
Several factors are driving the technology investment decisions being made to meet these life insurance market challenges. One driver is the demographic shift toward Millennials, who surpassed Baby Boomers in 2015 to become the largest living cohort in the US population. While insurers are increasing their investment in mobile and self-service, younger generations’ expectations for a seamless, end-to-end experience still exceed most current offerings.
The COVID-19 pandemic, along with related remote work and shutdowns, has increased the need to compete in a digital world across all generations. Consumer expectations are putting pressure on insurers to decrease costs while introducing new products and offerings that serve an increasingly diverse marketplace. With the increased importance of business intelligence and analytics, insurers are beginning to experiment with the integration of data from the expanded use of wearable devices, which can theoretically provide a more transaction-rich and connected experience between consumers and insurers. Insurers are continuing to look at new data sources to augment the underwriting process.
For insurers who are focused on addressing aging technology stacks, old platforms are frequently monolithic environments that support a variety of functions within a tightly integrated and inflexible platform. As a result, insurers may begin a broad modernization and transformation effort. A disaggregated approach toward improving functionality can also include deploying stand-alone tools for things like underwriting. Addressing transformation in functional pieces can offer faster incremental benefits and a less risky implementation.
To help insurers choose a new underwriting tool, Novarica released Life/Health/Annuity New Business and Underwriting Systems, a fully updated report on underwriting solutions that includes stand-alone components from full-suite policy administration solutions as well as solutions designed specifically for the new business process from point of sale to policy issuance and delivery. This Market Navigator contains in-depth profiles and comparative tables on 16 new business and underwriting systems for US life/health/annuity insurers to help insurer CIOs understand their options in the marketplace. Reach out to me at [email protected] to learn more about the latest developments in this space.
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