A Look at Insurance 10 Years Out

When some of the best minds in the life insurance industry peer into their crystal balls, the view a decade out holds some amazing opportunities, according to a LOMA survey of industry leaders.

Tune in, turn on or drop out seems to be one of the messages for the 10 years ahead. While the insurance industry may get leaner through continued mergers and acquisitions, those that perdure will be built on data savvy, digital acumen and client engagement.

Insurers that use data to make the buying process easier and more relevant to consumers are those destined for success. New distribution models and new types of products that are customized for the differing needs of various demographics will overtake traditional products and sales channels, the experts predict. Though technology plays a crucial role in this evolution, person-to-person interaction will still be key.

While direct online sales of some products are expected to grow, advisors, agents and other licensed professionals are seen continuing to dominate distribution of the majority of annuities and whole life products. Though self-service after policy inception will be standard, advisory services on product selection won’t fade. That said, underwriting will rely more on electronically collected data and predictive analytics at the early stages of sales.

Simpler products and solutions customized based on age, geography and term—even one-day or single-trip products—are set to blossom as online portals make it easier to buy protection speedily for events that insurers can classify and underwrite accurately using commercially available data. These kinds of innovative products will correspond to expeditious, accessible anywhere service platforms.

As health and wellness data become more widely cataloged online, life insurers may find opportunities for continuous underwriting based on ongoing inputs from policyholders who submit data via wearables, implants and other digital reporting devices.

Opportunities for cross-sales are predicted to grow as insurers expand service for people both at work and at home, exploiting their group sales presence to woo individual accounts as well. Cross-over can be expected from life to property-casualty to retirement savings plans. As the defined contribution model becomes more popular with employers, the cross-sales opportunities will grow, experts say. Those who can successfully market to multicultural and multi-generational work forces will move into leadership positions.