McKinsey: three priorities for modernising life insurance
Stating that this specific aspect of the industry has suffered from poor growth and profitability in recent years, the company points out market swings (particularly the growth seen in Asia) and the advancement of data analytics and artificial intelligence (AI) as destabilising factors.
Furthermore, global penetration has fallen by 3% over the last 10 years, and the COVID-19 pandemic has led to a depression in global interest rates, which has had an aggravated effect on the deterioration of life insurance stock.
However, McKinsey believes that a three-point roadmap for improvement could see life insurance revitalised for the post-COVID-19 era:
Personalising the customer experience
- Shift toward health and wellness management: An increasingly elderly population (by 2030, McKinsey estimates a 50% global increase in people over 60 by 2030, from 900 million to 1.4 billion) means that strictly coverage-based insurance is no longer sufficient.
- Continuous underwriting: Specifically, the report envisages a four-stage evolution: 1) automation, 2) digitally submitted applications, 3) personalisation using advanced data sets, and 4) dynamic adjustments to cover based on customer behaviour.
Developing flexible product solutions
- Customising solutions: With destabilised economic and social conditions disrupting the rigid frameworks of the old industry, life insurance needs to take into account more bespoke personal circumstances in order to remain relevant.
- Value-added services: As previously mentioned with regards to Vitality, insurance companies should consider enriching their products and service, as well as building profitable partnerships with other companies.
Reinvent skills and capabilities
- Embracing the ‘new workforce’: “By 2030, 44% of insurance work activities have the potential to be automated,” states McKinsey. Therefore, a new emphasis on fluid, tech-based roles focused on qualitative work will take precedence.
- Expand via M&A: The rise of insurtech means that life insurance incumbents have a faster route to modernisation. By partnering or even acquiring these innovative startups, legacy companies can imbue their established brand with cutting-edge digital technology, ready to meet the needs of modern customers.
In many ways, McKinsey’s report is reminiscent of to the industry in August: life insurance can be a strong force for support and stability in an uncertain world. Modernising established practices is the linchpin of achieving this potential.
Tribe and APOLLO announce national insurance campaign
Tribe Property Technologies in partnership with APOLLO insurance has announced a national insurance campaign to digitise insurance for condominium owners, renters, landlords, and developers across Canada. The aim of the campaign is to make insurance access easier and faster for owners while improving the coverage and protection of condominiums and rental buildings.
According to several surveys, nearly half of 4.5mn rented houses in Canada do not have tenant insurance protection, meaning those individuals and their families are put at risk of fire and water damage.
What does the national insurance campaign include?
According to Tribe, the company is working with APOLLO to ensure that this type of insurance is easier to access. It aims to achieve this by introducing a direct connection to APOLLO's insurance technology from both Tribe's strata and condo management platform and rental software to allow for increased education and awareness for owners into insurance risks and options.
It also includes the future ability for notifications for mid-term cancellations, and plans to offer protection from potential strata/condo corporation deductibles, Tribe said.
"We are excited to partner with APOLLO to bring accessibility, visibility, and education around insurance options to our communities and reflect the current lifestyle expectations of condo owners and residents while protecting the value of their biggest assets", said Joseph Nakhla, Chief Executive Officer of Tribe.
Nakhla added: “This agreement with APOLLO is just the first step under our Digital Services & Partnerships revenue pillar. We will continue to layer on services to drive revenue for Tribe, and bring convenience and savings for our users, with the goal of being able to offer a one-stop-shop to our development partners and the over 100,000 residents in Tribe-managed communities”.
APOLLO uses technology as a channel between insurance brokers, carriers, and their mutual clients, offering insurance options from multiple companies on one integrated online platform.
"We like that Tribe is taking a fresh approach to condo living and building smart homes through tech-enabled service, and an integration with their Community Platform supports our goals of making insurance more accessible and supporting the needs of communities”, said Jeff McCann, Chief Executive Officer of Apollo.