Accelerating Innovation in Life Insurance
This year continues to present challenges that force us all to think differently. The pandemic response promoted independent action, self-help and a heightened sense of social responsibility. This has accelerated the harnessing of technology as solutions for how we work, communicate, access healthcare, buy goods and receive services. Perhaps more than ever, we are aware of the risks we take and how this affects our chances.
For insurers, the focus on health and wellbeing could be a signal to launch new types of technology-led digital services and support for policyholders. Individuals who are embracing remoteness demonstrate a more open-minded attitude to sharing their data when using technology to get things done. Changes in patterns of working may have revealed shortfalls in existing protection product design that present an opportunity to do things differently.
The pandemic has cruelly also exposed the comorbid impact of previously reversible conditions, including diabetes, obesity and poor cardio-respiratory health. The socioeconomic consequences have also highlighted the financial inequalities behind the increased prevalence and unequal distribution of mental ill-health. Insurers will be asking themselves if they can do more to help.
A new era of preventative healthcare and remote monitoring means individuals can take control of their health by leveraging technology. Right at this moment, insurers have an excellent opportunity to engage customers with products that add some real value. Life practitioners have been flirting for some years with the idea of a new digital paradigm in underwriting, health protection and remote claims management. Perhaps now is the time for it.
Insurers aim to provide as many people as possible with financial protection. As recent claims have provided a grim reminder, Life insurance protection helps when all is lost, but products linked to health-boosting technology could help to prevent loss. Flexible Disability Income products that better serve home and gig workers could have eased the burden on government during the current pandemic. Developing products based on parametric design,1 such as digital health software, may allow consumers to receive much fairer levels of cover by deploying technology that avoids medical exclusions.
Offering products that offer flexible help rather than pure indemnity is only one aspect of improvements made possible by technology. Simplifying the road to policy issue is another. Chatbots and automated processes can link customers to insurers, and provide faster response times and increased levels of service with less hassle. Emerging technologies are promising to augment and replace current medical underwriting; digital apps and platforms are proven to positively influence medical outcomes. In view of these developments, insurers should leverage the new awareness about health and financial risk by appealing to consumers who have experienced for themselves the brittle nature of social support.
The Life industry has very effective and longstanding protocols that work well, and it has a low appetite for swapping proven methods for new ways of working that may not be as robust. But we are not promoting technology for the sake of it. Proxies for medical risk assessment, for example, will emerge as perfect replacements for health record paper chases and tricky application form questions. It is also important to offer safe solutions in this context, particularly in health interventions. The importance of safe solutions underscores the importance of selecting carefully from the large numbers of potential solutions, choosing only those with convincing scientific underpinning.
We all like technology that provides what we want while keeping our data safe. People, however, are also willing to engage and share data in return for something tangible. Working with these two factors, customers will soon be willing to offer disclosures of their digital health metrics in exchange for the benefits of health monitoring if they know their data will be protected and kept private. This is a period of opportunity for the Life industry. Over the next 18 months the smartest and most nimble insurers will take the collaborative action necessary to develop and deploy tech-based solutions for the new normal needs. Gen Re is working with many innovative technology companies and startups to make the leap of faith required to bring their solutions to life.
- Wikipedia defines Parametric design as “a process based on algorithmic thinking that enables the expression of parameters and rules that, together, define, encode and clarify the relationship between design intent and design response.” https://en.wikipedia.org/wiki/Parametric_design