Life Insurance Trends – A Decade From Now

Life Insurance Trends – A Decade From Now

Globally the life insurance industry has undergone a great change. Predominantly this change has occurred in developing economies like Asia who were small contributors in the past. Today they have grown to become international growth drivers accounting for more than half of the global premium growth.

Furthermore, the availability of data has increased, leading insures to make progress in artificial intelligence and advanced analytics. Additionally, digital and mobile advancement has raised the standard when it comes to service quality and transparency.

Customers are now able to access agents, file claims, get life insurance quotes, and get policy information simply by touching a tab on their laptop or smartphone. Although, this change is beneficial it comes with several challenges. Most recently the COVID-19 pandemic slowed down global interest rates even lower compared to those seen in 2007-2008 during the global financial calamity. This has lead to a disproportional impact on life insurance stock relative to the rest of the market. 

Trends – A Decade From Now

Many trends show potential for the life insurance sector this year and in the next decade. Customer demand have become higher than normal with the COVID-19 panic highlighting the need for mortality protection even more. Further to this, the replacement rates of public pension are declining, and healthcare out pay is on the rise – such trends have been made worse by the COVID-19 outbreak. In addition, the middle class is expanding on a global scale and at a rapid pace, with rising income levels, growing financial wealth, and increased risks to manage.

By the time 2030 comes, almost all baby boomers will be 65 years old or older and most of them are expected to outlive their retirement savings. In view of this, the life insurance industry is confronted with a key dual opportunity. Firstly, it has the chance to fulfil a growing customer needs while achieving growth and profitability. To attain these objectives, it’s anticipated that winning life insurance companies will excel in three areas in the decade ahead:

• They will take every consumer’s experience to heart and personalize all aspects of the customer experience.
• Create dynamic product solutions designed to suit a challenging regulatory and interest-rate environment.
• Innovate and re-engineer skills and capabilities.

The reality is that the influence of digital leaders in other industries has increased the standard for insurance as well. Many areas offer opportunities for personalization that can add significant strength to customer relationships.

Moreover, life insurance companies have maintained a focus on mortality protection for a long time, but anxiety over mortality risk has declined in a number of markets, thus reducing the demand for core products.

Although this is factually true, a recent increase in online research for life insurance has been exacerbated by COVID-19. The mortality risk is likely to continue to decline long term. For this reason, insurers will play a key role in the health of their customers as life expectancy rises and health trends shift in the coming decade. 

Final Words

Life insurance companies should take a “shrink to grow” approach, which will prove to be a popular way for them to launch their next S-curves. This method will give them the direction to focus on new opportunities they won’t want to miss. 

Guest Article.