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Sunday, April 15, 2018

LIFE INSURANCE INNOVATION: FOUR POWERFUL EXAMPLES

  April 15, 2018    

LIFE INSURANCE INNOVATION FOUR POWERFUL EXAMPLES

The digital economy is rapidly changing the way in which life insurers market and sell their products and services. Already some companies are successfully adapting to the brand new demands of the marketplace. These are the Digital Transformers. They're moving quickly to get new customers, deliver new services and open new markets.

Accenture's recent quarterly Digital Life & Health Innovation Tracker identified five key trends shaping the life insurance industry in mature markets:

Extended ecosystems. Innovative insurers are partnering with players beyond your insurance sector and even beyond financial services.
Culture of sharing.Insurers are generating new business opportunities and enhancing their brands through social aggregation media and initiatives.
Mobility.Mobile technology allows customers to use products and services when the necessity arises—anywhere and anytime.
New market opportunities.Insurers are introducing new aspects of competitive differentiation and increasing sales opportunities and new business.
The client experience. Improved customer experience enables insurers to improve the perceived value of their products and services by enhancing consumer satisfaction and meeting rising expectations.
The first two trends, extended ecosystems and culture of sharing, emerged in the quarterly survey for the initial time. They're becoming increasingly important.

In my previous blog I discussed a number of the emerging opportunities highlighted by an Accenture study of the U.S. insurance market. Below are a few types of innovative Digital Transformers in Europe and Asia:

Community Life, a German start-up, launched an electronic digital portal which provides simple, transparent disability and term life products, along with empowering customers to participate in product development. The Community Life portal acts being an insurance broker, turning the standard life insurance distribution trope on its head through the use of simple insurance contracts without technical jargon.

Max Life Insurance, one of India's leading life carriers, has launched a digital campaign called “Second Chance” to produce public awareness of the requirement for protection through life insurance. The campaign uses videos of human-interest stories on social media marketing platforms, such as  YouTube, Facebook and Twitter, and directs viewers to a web site to find out more about life insurance.

Genertel Life in Italy has launched I-Life, a life insurance policy which is often easily accessed by users of mobile devices. Prospective clients are provided with the full quote online in around five minutes. The merchandise includes incentives that reward customers who take care of their health. When they make the most of the free medical checkup, for instance, they receive an immediate discount of 10 percent on their policy premium and a further 10 percent if they are found to be in good health.

ERGO Direkt, a subsidiary of ERGO Group and the third-largest direct life insurer in Germany, enables customers to utilize an electric signature to buy term life insurance online after entering their data and answering health questions on the smartphone. Customers receive their policies within three business days.

These are only a few types of what Digital Transformers are doing to activate customers, apply digital tools, and create ecosystems to compete effectively in the newest digital world.

When you have any other samples of successful Digital Transformers in the life insurance industry i'd like to know. I'd be keen to fairly share your input.

Meanwhile, take a look at several of those links. I do believe you'll locate them useful.

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WHY LIFE INSURANCE IS GROWING MORE COMPLEX

  April 15, 2018    

WHY LIFE INSURANCE IS GROWING MORE COMPLEX

There is a popular saying, widely caused by Einstein: “Everything must be made as simple that you can, but not one bit simpler.”

Irrespective of who said it first, the idea it expresses is powerfully relevant across the life span insurance industry today. Complexity is rising forever insurers on multiple fronts, from policy administration to internal operations. Things just take too much time and cost a lot to maintain. Left unchecked, this complexity could leave carriers hobbled at a time when organizational agility is more important than ever, as consumers continue to question the value of life insurance products. While the factors behind falling life insurance sales are many, complexity plays two important roles in this bigger story.

First, complexity impedes growth and the ability to execute. A lot more than ever, insurers need certainly to transform and grow their core business to operate a vehicle investment capacity and to generate the fuel for growth, as they turn to innovate and evolve their strategies. Second, complexity hinders standardization, which is required to unlock the benefits of automation—an essential tool for insurers trying to shrink operating costs and improve the consumer experience.

This makes understanding the drivers of complexity a matter of great interest for a lifetime insurers.

Accenture's analysis of the suggests there are four fundamental drivers:

Digital disruption: “Digital” is transforming large portions of the whole insurance industry. You will find significant rewards for insurers who adapt efficiently. But, in the short term, the transition to all or any things digital is adding complexity..
Changing customer expectations: Customer expectations for a great experience are transcending industry boundaries—a pheomenon we call “liquid expectations.” Increasingly, when someone uses Amazon or Uber, they expect the same personalized experience exactly where they go. These expectations are increasingly driving the agenda of numerous life insurers.
Segment and channel expansion: Complexity is growing as life insurers add new customer segments and channels are added. Each has its own unique personality and operational needs.
A widening variety of products: Aligning and integrating distribution across an ever-widening array of products is a sophisticated job. Carriers will also be creating complexity as they increasingly leverage the partner ecosystem to boost their offerings with value-added services.
Needless to say, this is not saying that all complexity is detrimental forever insurers. Simplifying for the sake of simplifying is dangerous. Yet carriers must take pains to distinguish between good complexity, which creates operational efficiencies and variety valued by customers, and bad complexity, which creates variety that customers don't value and reduces organizational agility and efficiency in trade for no benefit.

Life insurers that minimize bad complexity while maximizing good complexity—that conquer their complexity, so to speak—share certain attributes. They control exactly how many products and services they offer. They evaluate whether new offerings are worth the complexity they'll introduce. They minimize complexity within their internal operations. And, finally, they focus relentlessly on offering the “right” amount of complexity to meet customer requirements.

Controlling complexity can make life insurers more efficient today and position them to grow tomorrow. The next occasion, we'll take a peek at how they can measure and manage their complexity.

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