As Millennials and Gen Z, who came of age with cell phones and social media, are getting married and having children, they’re aging into the need for coverage. To engage this demographic, we have to meet them where they are – online. And frankly, it’s where all our customers are – according to the Pew Research Center, 85 percent of Americans now own a smartphone, up from 35 percent in 2011.
Subscription services and other technology-based renewals have become second nature for many, thanks to the ease of setup and implementation. Insurance companies must follow suit and create an intuitive process that centers on affordability. Allowing for education, engagement, price comparison, and abbreviated purchase timelines online is how carriers will begin to appeal to younger consumers and close the coverage gap.
Insurtech for the real world
The expectation among modern buyers is for an entirely digital experience – similar to the way they purchase nearly everything else, from luggage and mattresses to vitamins and dog food. Much of the industry’s outdated infrastructure doesn’t lend itself to rapid modernization.
The 2022 Insurance Barometer Study discovered that the need gap is also at an all-time high, more than double that of 12 years ago, with over a quarter of Americans saying that they will not feel financially secure should a sudden loss of their household’s primary wage earner occur.
This profound change in the coverage gap underscores the need for modernized IT and more cloud-based technology. Simply put: the way to provide financial stability to more families is to make it easier for them to obtain life insurance. And a full-stack tech solution is the all-important first step – allowing for a total rethink of carriers’ cost structure, profitability, and areas of focus.
Companies willing to make material changes to the tech beneath their acquisition, underwriting, and retention will not only maintain, but will likely increase their market share.
It’s no surprise that the VC-backed tech industry has set its sights on life insurance, given the space for innovation. But in a crowded field of wishful thinkers, those who seek to solve carriers’ challenges with bespoke solutions will come out on top.
One-size fits all platforms or solutions that don’t connect all the dots will leave the same gaping holes in the process as the existing patchwork.
AI will become table stakes, completely altering the traditional approach to life insurance. For example, the ability to assess an individual’s behavior and activities through add-on technology, such as that of a wearable fitness tracker or heart rate monitor, will play a prominent role in risk assessment. This integration with new technology will allow providers to connect with their clients and create a policy specifically suited to their needs.
Another innovation from Silicon Valley will be the seamless integration of martech with the enrollment process. Utilizing data to find the right applicants, usher them through the application process quickly and effortlessly, and even retain them will no longer be driven by separate and independent teams.
And once the innovation begins, it will remain constant. The tech will learn, iterate and improve at increasingly faster intervals. The shared learnings coming from these venture-backed startups will increase value for many carriers struggling to prioritize modernization affordably with in-house resources. The life insurance industry recognizes the need for change, and advanced technology will allow it to meet the needs of new and potential customers.
Source: Digital Insurance