A new study by LIMRA, an industry research group, highlights five key drivers that will shape the life insurance industry in 2017. These drivers are: regulation, the changing consumer, technology, innovation and talent management.
In terms of regulation, the most prominent shift is towards transparency and consumer protection, says LIMRA. This shift has advisors examining how they interact with clients and looking for ways to show their value. The research suggests “financial planning and advice will shift from an “art” to more of a “science.” Financial professionals will have to expand their interactions with clients and rely more on technology.”
Technology advances have changed the way consumers access information to help with their purchasing choices. “For example, LIMRA research shows that 70 percent of life insurance shoppers conduct research online as compared to less than 40 percent in 2006.”
LIMRA expect more insurers to adopt a customer-centric model. “LIMRA has witnessed insurers focus more on the customer experience to develop a stronger direct relationship with their policyholders. These initiatives are leading to innovative product design and unique customer service ideas.”
Blockchain is promising
Blockchain, a decentralized public database that is designed to be “hacker-proof,” is a promising new development. “LIMRA believes there are several potential uses for blockchain in the financial services industry, including underwriting, customer payment, policy administration and investment management.”
With respect to innovation as a driver, LIMRA sees it in many areas such as “product design, customer engagement, distribution concepts, etc.”
Regarding talent management, the study suggests insurers will evolve their recruitment and retention programs to stay competitive. “Roles will continue to change and in a few years, some current roles might be completely unrecognizable as companies take advantage of artificial intelligence and other technologies.” For more findings, LIMRA members can read the full report.