A 2020 Year in Review: Life and Health Insurers Evolve to Take On Future Disruptions

A future look at life and health insurance

The COVID-19 pandemic has pushed life and health insurers to respond to new market and operational realities. This transformation provides signs of what challenges and opportunities await them in 2021 and beyond.

According to a survey conducted in July and August 2020, nearly half of insurance executives claimed the pandemic made them realize how unprepared their companies were for the challenges it had created. Insurers therefore spent most of 2020 responding and adapting to emerging challenges as they arose.

As these companies continue to evolve, key lessons and transformative trends are emerging, with clear implications for the future of the industry. Progress in these areas will come to define successful insurance companies in the years to come. As we will discover, they are shaped by accelerated digital initiatives that drive lasting competitive value, for both insurers and their customers.

What Changed in 2020?

2020 stands as a reminder to insurance advisors of the roles they play in our society—of their responsibility to clients and their loved ones through difficult times. Delivering on those needs has required new approaches to cost efficiency, smart organizational solutions, and digital or automated tools that will come to define successful insurance in the years to come. 

For example, the rapid development of AI-driven technologies, insurtech, and connectivity have taken on new precedence as employees continue remote work. Traditional insurance companies are under increased pressure to achieve new levels of operational efficiency and customer success.

Insurers are also reaffirming the human side of their business, placing greater emphasis on empathy and personalization in client interactions. As we will find, digital transformation lends itself to improvements in this area as well.

4 Key Trends Shaping the Industry’s Future

The following four trends are critical to future success in health and life insurance. It behooves insurers and insurance advisors to assess their strengths and weaknesses as they consider embracing these new and exciting strategies.

1. Transition to digital insurance applications

Connected digital tools have only become more important as employees have adjusted to remote work. Connected insurance applications are playing a vital role in helping insurers service clients when they can’t sit face-to-face.

Insurers can provide clients with digital access to critical claims information, in-depth policy details, and agents themselves. Insurers will increasingly leverage electronic health records and prescription databases for critical health information as well—even eliminating the need for health exams in some instances.

Digital marketplaces like Finaeo can also contribute to a more equitable buying experience. Brokers can maximize efficiencies when introducing new policies to clients, as marketplaces empower and connect the global health and life insurance industry.

2. New and innovative underwriting processes

Underwriting transformation has been underway for some time, but the challenges of 2020 have accelerated its use. As remote work becomes the new norm, insurers will look to automate labor-intensive underwriting processes using AI-driven tools. They will also use predictive and automated features to supplement human labor in key functions.

The industry will continue to transition to a “continuous underwriting” model as these developments unfold. Bolstered by greater connectivity, new sources of data, and advanced digital tools like AI, underwriting will become a more personalized and fluid process for insurers and clients. (Learn more about the effects of COVID-19 on underwriting here.)

3. New and improved quoting tools

Insurers will improve operations and efficiencies in the quoting process as well. They will supplement human interactions with clients using tools like natural language processing (NLP), which automates key aspects of the quoting process in a seamless and personalized way. In time, the quote-to-buy process may be carried out entirely online, often via mobile devices—with minimal human interaction required, and without additional risk or cost to the insurer.

Aggregators and marketplaces will become more important to advisors, as clients seek more optionality and personalized recommendations from their advisors. As we all become accustomed to finding the best deals online, advisors must demonstrate to clients they are using real-time digital tools to deliver the best results.

4. Improved advisor-client communications

The most successful insurance advisors of 2020 are those that made themselves available to clients when they needed them most. Insurers must continue this habit of availability with the help of digital tools. Mobile apps, chatbots, and intelligent technology for advisors will supplement the advisor-client relationship, as will more streamlined means of connecting with advisors directly.

Along with these new channels, successful insurers will re-skill or up-skill advisors with emotional and interpersonal skills for more personalized and empathetic client interactions. These skills will be crucial, as human advisors will increasingly handle only the most sensitive interactions, with automated features helping clients with more direct concerns.

What to Expect in 2021 and Beyond

After a year of unprecedented hardships, 2021 presents new opportunities for insurers to transform their companies and create value in ways that weren’t possible before. Now is the time for companies to make incremental improvements to their advisory practice, starting with the areas of greatest concern to their clients. 

At Finaeo, it’s our mission to bridge the digital divide between insurance carriers, brokers, and clients. Our marketplace has become a critical part of the industry’s digital transformation, providing brokers with direct access to carrier products to accelerate the quoting, underwriting, and binding of policies in real-time. Contact us today to learn more.