By Donna Jermer
Digitization has become an enormous part of our lives in the 21st century. Sometimes, it’s impossible to picture what life would be like without a plethora of information at our fingertips.
“There is almost no area in which digital technology has not impacted me and my family’s life,” Larry Irving, co-founder of The Mobile Alliance for Global Good, once wrote.
Irving’s words found their way into a 2018 Pew Research Center report. So too did those of tech forecaster Paul Saffo, who said, “Digital connectivity has become like oxygen, utterly essential to my research.”
Digitization has, in fact, transformed the very institutions and services that support us. That includes the insurance industry, which has been disrupted by the use of technology innovations created to squeeze out savings and efficiency from the current insurance industry model, also known as insurtech. This legacy sector has been forced to evolve and adapt as evidenced by the fact that a staggering sum of $4 billion was invested into new industry technology just a few years ago.
The pandemic further hastened the sector’s digital transformation. Kartik Sakthivel, chief information officer at LIMRA, told the website Digital Insurance that the industry has “fully embraced” change because of COVID-19. By LIMRA’s calculations, 75 percent of North American enterprises invested in some type of a digital pivot .
The introduction of online shopping portals and electronic application platforms were key offerings that retained customers. As Sakthivel put it, “Equipping agents and advisors to be able to continue to create that level of engagement with a frictionless experience will be more common in the future.”
The advances have been particularly effective in simplifying the underwriting process within the property and casualty sector. While that process is more complex in life insurance, at its essence it’s much the same, as it involves data collection and analysis. As a result, solutions are applicable to that space as well. The caveat is that what works for one carrier might not work for another; nonetheless, digital innovation is the means by which underwriting can be achieved in a more timely and efficient manner.
This method also allows for streamlined payment processing, as consumers are seeking different ways of providing remuneration — i.e., through various channels and via a variety of devices. Through innovation, companies can meet these desires.
Additionally, these channels increase cybersecurity and the bottom line is an enhanced customer experience. According to Deloitte, almost 90 percent of those buying life insurance prefer to manage their policies via digital channels. Satisfying that demand leads to greater consumer engagement and brand loyalty, as well as a lower attrition rate.
Simply put, digital transformation is revolutionizing life insurance the way it has transformed other sectors — accelerating the process of identifying customer needs, building solutions to meet those needs and then distributing a good or service that will accomplish that task. Insurance executives are aware of the advantages these advances can bring. Some 79 percent of those leaders believe that artificial intelligence will transform how products are produced and delivered by various organizations.
All of this explains why insurtech has been so disruptive. A $1.5 billion business in 2018, was estimated to show a compound annual growth rate (CAGR) of 43 percent through 2025. Additionally, these upstarts are looking to partner with incumbents; fully 63 percent of them indicated as much.
As McKinsey’s report noted:
Carriers have an opportunity to differentiate themselves by providing an excellent customer experience across multiple points of contact and “moments of truth.” The outlook is positive for carriers that move quickly and decisively in a “winner take all” world.
It is an ongoing process, and organizations will want to consider approaching it in a methodical fashion. Putting the customers first and providing solutions, not products is key.
Other actionable steps include:
- Do your due diligence: Find the solution that works best for your organization and customers, as opposed to wasting time and resources on those that do not. Shareholders, forever wary of new gadgetry, need to be convinced of its efficacy.
- Understand the importance of collaboration: Assemble a strong team (some go so far as to label it a SWAT team) — one capable of providing perspectives from outside the industry, as well as within. While connecting with your customer base, collect and examine data on your customers. Gain a firm understanding of what that data means. The more viewpoints, the better.
- Have a plan: Evaluate your existing capabilities. Understand what needs to be built out, and what needs to be replaced. This is a process, and it’s important to take a methodical approach, as opposed to looking at things through an all-or-nothing lens.
- Make yourself stand out from the crowd: Consumers are digital-savvy, and thus discerning about what works best for them. As a result it is incumbent upon providers to differentiate themselves, and (again) develop an understanding of their clientele. Make sure their concerns are heard and address them.
- Understand that there’s no time like the present: The best time to get started on digital transformation is, yesterday. Digitization can’t wait, as this is not the wave of the future, but rather the wave of the here and now.
Life insurance providers have a lot to gain and little to lose by undergoing a digital transformation. The overhaul, hastened by the rise of insurtech and now the onset of the pandemic, is much needed and will reap profound benefits. At the same time, carriers can look forward to gaining a deeper understanding of the lay of the land, and what will serve them best in the long run. We all want to change the world, and luckily digital assets are helping life insurance agents do just that.
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**Boasting over 25 years of experience in the insurance and marketing fields, Donna Jermer has served as Marketing SVP for iptiQ Americas by Swiss Re since May 2019. In her role she oversees the marketing of iptiQ’s customized insurance and digital solutions, including acting as Director of Marketing for Lumico Life Insurance.
Known for her ability to shape, design and drive marketing agendas, Donna Jermer has served as both an in-house executive and an external consultant. She has directed, managed and implemented multiple successful B2B, B2B2C, D2C strategies and campaigns for multiple distribution channels.
Before her leading positions at iptiQ and Lumico Life Insurance, she served as the vice president and distribution lead at RGAX from 2016-19, and SVP at AMT Workforce Benefits from 2014-16. Prior to that she held executive positions at Yieldmark Advisors, CNO Financial Group, Forethought Financial Group, Protective Life and Western & Southern Financial Group. Other past brands include Fifth Third Bank, Luxottica Retail, P&G, Colonial Penn and AmTrust Financial.
Donna Jermer earned her Bachelor’s of Science degree in business and marketing from Bowling Green State University, Ohio, and her mini-MBA in marketing from Rutgers University. She is a frequent speaker at industry conferences to share her expertise and on behalf of iptiQ and Lumico Life Insurance.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.
