By Rob Starr, Content Manager, Big4.com
According to PwC US’s “Life Insurance 2020: Competing for a Future” report, companies operating in this sector will need to cope with major social, technological, environmental, economic and political factors and take advantage of emerging opportunities to survive over the next 10 years.
Jamie Yoder, PwC’s US insurance advisory practice co-leader comments:
“To survive in the long term, life and pensions companies will need to actively identify and handle threats as they emerge, rather than passively responding to market changes,”he says. “Insurers will need to focus on simplifying the presentation of products and features to customers and advisors, while overcoming a complex set of processes at the back end”.
These factors powering change in the sector have the potential to drastically impact the role of life and pension insurers. Some of these market trends include: an aging population increasing demand for retirement income and pension solutions; advances in “big data” and analytics allowing insurers to design products that minimize complexity and meet consumers’ need at different life stages; continued risk of government welfare cutbacks, which could shift retirement and benefit decisions back on consumers; shifting economies across the globe in developed and emerging countries; and increasing medical advances (e.g., wearable health monitoring devices, personal genomics) coupled with rising medical costs are increasing risks for consumers and highlighting the need for ”well-being” and other pro-active health management programs.
Responsibility for retirement planning and ancillary benefits has the risk of being pushed from governments and employers to individual consumers. Since customers have become accustomed to the convenience of digital education, research and transactions when they want, where they want and through any channel they want, distribution of products is changing rapidly.
Leading insurers are turning to advanced analytics and external sources of data from purchases, social media and other digital means to understand customers better. The challenge for insurers is using that data when developing new ways for tailoring products for customers.