AI Automation In Global Long-term Insurance Trends
The global long-term insurance space is at an inflection point. With the world still feeling the effects of the pandemic and now facing new shockwaves thanks to global conflict, political instability, and widespread economic uncertainty, it’s easy to see why. All of this has driven a reinvention of the industry, as insurers look for new ways to evolve on untapped markets, identify and leverage new opportunities and boost overall efficiency, whilst unlocking as much value as they can to their clients
In addition to this, changes in client needs and expectations will create new avenues for insurers to change offerings up; particularly around where they sell their products, how they sell their products and how they can create maximum value for clients .
What we have seen in recent years is growth in a culture of innovation across the industry as insurance businesses search for fresh ways to improve traditional operating models, explains Natashia Janse van Rensburg, Finance Manager at Sanlam Indie. “The insurance space isn’t traditionally known for innovation, but as the world changes, we need to adapt and be agile too.”
Below are four key trends that are driving change across the long-term insurance space.
#1 Entirely new business models
More and more, people are realising that they need to plan for unforeseen events, and for the future. This creates new opportunities for the industry. But this must go beyond offering loyalty and gamification programmes to promote client engagement.
Insurers that expand and evolve their product shelf to create a more streamlined, integrated experience can expand their portfolio of offerings through partnerships with other service providers and third-party vendors. Going forward, insurers will have to identify new ways to “unbundle” their value chain so that they can drive growth and deliver more distinct offerings to an increasingly particular and discerning client base.
#2 AI use to identify new opportunities
When it comes to the level of experience customers expect from the brands, they choose to do business with, technology has totally changed the game. By integrating new and emerging technologies with conventional products, insurers can streamline how they address the challenges, and maximise on the opportunities that lie ahead. According to Natashia, advances in AI and data analytics enable insurers to refine market segments and make better recommendations to clients around the type and level of cover they need.
Something like embedded insurance—which places an insurance product along the customer journey of products and services sold by non-insurance companies—can help life insurers capture new opportunities by allowing them to connect with different prospective clients. In addition, all of this data enables insurers to offer more personalised insurance cover instead of the one-size-fits-all products currently available.
#3 Simplicity is key
Most of us have signed an insurance contract without reading the entire thing. This is because heavily worded insurance policies packed with different provisions and tons of jargon can be very intimidating and hard to understand. Using plain language is especially important in the digital world as an increasing number of clients abandon agents and buy insurance directly, online.
By demystifying our products and clearly communicating the benefits that long-term insurance can bring, you empower your clients to make the right buying decisions based on their specific needs. Here, financial literacy and showcasing the value of these products is also incredibly important as it puts the power in the hands of the consumer.
#4 Improving underwriting
The right technologies hold tremendous potential to change the underwriting function. By automating data capture and evidence gathering, underwriting decisions can be made in real time. In instances where further scrutiny is required, the case can automatically be referred to a human underwriter who has the time to do what they do best – assess risk and complete a more in-depth analysis to determine the right price based on this risk.
This makes decision making far more efficient, which is a major competitive advantage for modern insurers. By combining human expertise – where necessary – and automation, you can offer better experiences for underwriters and potential policyholders alike, notes Natashia.
As insurers recognise that innovation can accelerate the pace of change across their businesses, they will start embedding an innovation culture into everything they do, concludes Natashia Janse van Rensburg. In doing so, they can create new and exciting offerings that cater to emerging risks and meet changes in client expectations.
By Natashia Janse van Rensburg, Finance Manager at Sanlam Indie