Insurtech predictions for the life sector in 2023

Despite 102 million Americans reported needing life insurancemarket uncertainty, layoffs and inflation will keep many of them from making the jump in 2023. Optimizing the sales funnel, eliminating friction in the application process, and focusing on value will help carriers claim their share of a more competitive market.

Transformation Priority
As millennials and Generation Z, who have come of age with mobile phones and social media, get married and have children, they are getting older and in need of coverage. In order to engage this demographic, we need to meet them where they are – online. And frankly, this is where all of our clients are located – according to Pew Research Center85% of Americans own smartphones, up from 35% in 2011.

Subscription services and other technology upgrades have become second nature to many due to their ease of setup and implementation. Insurance companies should follow suit and create an intuitive process based on accessibility. Providing an opportunity for learning, interaction, price comparison and shortening of online purchases is how carriers will start to attract younger consumers and close the coverage gap.

Insurtech for the real world
Today’s shoppers expect an all-digital experience — similar to how they shop for almost everything else, from luggage and mattresses to vitamins and dog food. Much of the industry’s outdated infrastructure is not amenable to rapid upgrades.

2022 Insurance Barometer Study found the need gap is also at an all-time high, more than doubling from 12 years earlier, with more than a quarter of Americans saying they would not feel financially secure if there was a sudden loss of their family’s primary breadwinner.

This major change in coverage highlights the need for IT modernization and more cloud computing. Simply put, the way to provide financial stability to more families is to make it easier for them to get life insurance. And an end-to-end technology solution is a critical first step to completely rethink carrier cost structures, profitability and lines of business.

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Companies willing to make significant changes to the technology as part of their acquisition, underwriting, and retention will not only retain, but likely increase their market share.

Startup specialization
It’s no surprise that the venture capital-backed tech industry has set its sights on life insurance given the space for innovation. But in a crowded circle of wishful thinking, those who seek to solve carriers’ problems with customized solutions will come first.

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 be at the table, completely changing the traditional approach to life insurance. For example, the ability to assess human behavior and activities using complementary technologies such as a wearable fitness tracker or heart rate monitor will play an important role in risk assessment. This integration with the new technology will allow providers to contact their customers and create policies specifically tailored to their needs.

Another innovation of Silicon Valley will be the seamless integration of martech with the registration process. The use of data to find suitable candidates, quickly and easily navigate the application process, and even retain them, will no longer be carried out by separate and independent teams.

And once innovation starts, it stays constant. Technology will learn, repeat and improve at ever faster intervals. Sharing the experience gained from these venture capital-backed start-ups will add value to many carriers trying to make priority upgrades affordable with their own resources. The life insurance industry recognizes the need for change, and advanced technology will enable it to meet the needs of new and potential customers.

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