As interest rates stay low and competition for customers stays high, life and annuity insurers are focusing on improving digital customer experiences and the speed of new business processes. Insurers are mindful of the importance of deploying capabilities that can support multiple distribution channels and leveraging key components to provide holistic, unified experiences.
These factors are particularly important for supporting omni-channel capabilities, a requirement in business models that allow for direct-to-consumer capabilities. Insurers looking to improve agent and customer portals and digital new business often consider replacing or enhancing their illustrations capabilities as they modernize their technology stacks.
Illustrating Unified Experiences
Insurers employ illustration software primarily for new business processes to provide agents and policyholders with information about policy benefits, premiums, and expenses. Illustration software is often integrated with other self-service sales support tools like needs analysis, quoting, and e-application solutions. Insurers also use illustration software to support in-force quotes and for calculating policy values.
Agents and customers continue to expect solutions that are available via multiple communication channels, including mobile. Users expect this software to share data and be available in connected and disconnected modes, the latter of which is difficult to implement for many sales tools. Insurers want solutions that allow agents to provide superior experiences for end customers during sales or policy-serving interactions.
Updating Illustrations in Response to Compliance
When regulators and sellers of whole life products voiced their concerns about the marketing of indexed universal life products, the NAIC adopted Actuarial Guideline 49 for indexed universal life illustrations. The guideline became effective for all policies sold on or after September 1, 2015 and for all new or in-force business as of March 1, 2016.
The committee continues to consider other changes for annuity and term life products. AG 49-A was approved at NAIC’s Fall Meeting on November 20, 2020; changes went into effect as of December 14, 2020. While some insurers continue to use in-house solutions, many look to third-party solutions—whether stand-alone or part of a policy administration suite—to manage regulation changes and to improve illustration capabilities as part of digital customer experience initiatives.
While the illustrations marketplace has experienced consolidation through mergers and acquisitions over the last several years, illustration and integration capabilities have improved. For an in-depth look at illustrations systems, and 13 vendor solutions currently available to US insurers, see Novarica’s recent Market Navigator Illustrations Systems.
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