Innovations in Life Insurance: Distribution
October  2017

How are the global resources of SCOR being used to support innovation in life insurance distribution?
Within SCOR Global Distribution Solutions, which includes ReMark, our focus is to support our insurance partners globally in understanding and engaging with their end consumers. We see how quickly technology is enabling consumers to inform themselves and purchase very differently than how they used to – just a few years back – and we aim to remain ahead of that curve.

What are the most significant changes in “direct to consumer” marketing?
The most meaningful change in direct to consumer marketing is that companies are coming to realize that to drive growth they need to focus on the consumer journey rather than just the offer. A price and brand strategy alone are not sufficient differentiators
to attract consumers who are more likely to purchase from an insurer if it’s easy and relevant for them.

We see insurers decreasing media spend (TV ads, for example) to re-invest in social media forums. From these forums, consumers signal interest and are guided through mobile application (with an increasing amount of chatbot usage powered by artificial
intelligence) to review tailored product offerings. If the consumer wishes to speak to a “live agent” – without leaving the environment – they should be able to do so. This makes channel management more difficult for insurers but consumers want to transact where
and how they feel most comfortable, including using multiple channels during the same purchase.

ReMark conducts an annual Global Consumer Study (GCS). What are some takeaways from the last study that every life insurer should keep top of mind?
The 2016 edition, You Can’t Always Get What You Want, focused on the perception of life insurance needs from the viewpoint of the consumer and the inherit trust (or not) that they have in the industry. Some of the key takeaways were:

  • Consumers globally have a certain level of cynicism about the purchase of life insurance, and some doubt the relevance of purchasing it. To curb this trend, insurers need to invest more in value propositions and consumer incentives.
  • Consumers often dont understand what they want or need. Product innovation needs to extend beyond features to components that are relevant, such as the need for Health and Wellness. Products need to be simple to understand and
    transact.
  • Consumers in most markets are generally willing to share personal data from their wearables if they can gain a tangible benefit from doing so. Hence the growing trend in rewarding healthy lifestyle behaviors.

What can you tell us about the recently published 2017 study?
Life is a Rollercoaster is our 2017 edition and focuses on a few key themes:

  • The behavior and attitudes of millennials towards life insurance and protection in general. This market segment is much sought after but difficult to engage.
  • The need to respond to changing attitudes and behaviors by focusing on health as a way in to the consumer for life insurers.
  • A focus on automation to make purchasing seamless (integration of data sources, reducing repetition, improving the user experience and making the purchase easy).
  • The need to reduce the burden of choice to empower rather than overwhelm and to reframe propositions in a more positive way to chime with, encourage and reward contemporary desire for a healthier lifestyle.

 

ReMark’s 2017 study finds that a focus on health is a way in to the consumer for life insurers. The full study, Life is a Rollercoaster, is available for download online or request a print copy via email.

In the past, innovation came from within insurance companies and with traditional external vendor/partners. Now we see InsurTech startups moving into the insurance space. What’s driving this?
The most interesting aspect of most of these InsurTech companies that are moving into the insurance space is that they often aren’t from the insurance industry. Once launching their products, they realized the very strong applicability their products or services have
in the insurance space which is very broad (covering life, health, property & casualty).

The additional attraction for these startups is that Insurance is a very established industry and is traditional in its approach to change. So the breadth of applications that be can be deployed combined with the perception that the industry is ripe for change, if not outright disruption, is motivating many newcomers.

Plug and Play is a technology accelerator for startups and investors. They now have an InsurTech program. What’s the significance of this to the industry?
Plug and Play has been operating for more than 10 years and has invested in some of the biggest brands we know today, such as PayPal and DropBox. Their InsurTech vertical is relatively new but has grown to be one of their biggest verticals in the past 18 months with many insurers, brokers and reinsurers joining the program in search of innovation.

The significance is twofold. First, it means the industry is attractive for startups, and real innovation across all sectors of our business is to be expected. Second, it shows that the
industry participants recognize the changing landscape and are aiming to proactively embrace novel solutions either for internal improvements or better consumer engagement.

You attended the recent Plug and Play Expo. What areas of life/health insurance are generating the greatest interest among startups and entrepreneurs?
We attended a selection summit and saw more than 50 start-ups present their products and services during “pitch” sessions. It was exciting to see so much energy and innovation being worked on across a wide range of our industry. For Life/Health specifically, the key areas were:

  • Application of artificial intelligence for chatbots, distribution
    and consumer targeting
  • New sources of data and how to access them for better risk
    profiling
  • Health and wellness platforms – including gamification to
    incentivize the consumer to join and remain interested
  • New non-invasive technologies for diagnosis and prevention
    – watches, soles, socks, bands and more