12 ID Trends 2020
Shifting to continuous underwriting flips the actuarial approach on its head , relying on nontraditional and new types of data sources .
Life insurance industry faces a pivotal , dual opportunity : the chance to fulfill growing customer needs while returning to profitability and growth .
Now Continuous underwriting
Lifestyle
Lifestyle data will become easiest to collect and most likely to be shared by customers ; winners will best understand how to use these inputs to proxy current and future health risks .
Health and environment
Health and environment data will evolve from its current form to be more dynamic and meaningful — eg . genetics , pollution sensors .
Medical data
Medical data will continue to be most powerful ( and necessary for some segments ). However , winners will find nonintrusive ways to obtain this by being a natural part of the data flow .
Profitability Trends from page 11
Flexible product solutions
In the coming decade , the industry will see the emergence of new types of coverage , as well as increasing flexibility in product coverage and payment . Household debt is still more than 100 percent of net disposable income in most OECD countries , 8 divorce rates continue to rise , and job insecurity , spurred by technological advancements , can create uncertainty for consumers . Indeed , despite a decade of global economic growth , nearly 50 percent of consumers are somewhat or very concerned about job loss for themselves or a member of their household . New products that help allay those concerns , as well as increase coverage and premium flexibility , will likely prove increasingly popular with consumers .
Flexible offerings , which allow the consumer to adjust coverage throughout the life of the policy , have been met with favor in Japan . For example , a leading Japanese insurer offers medical , asset accumulation , and protection against dread disease and mortality wrapped into a single product , enabling the customer to add or reduce coverage as their circumstances change .
Value-added services
Over the next decade , product innovation will likely expand to adjacent services . Life insurance companies , which are competing with not only their peers but also industry alternatives such as pure wealth and asset managers , will increasingly seek to differentiate themselves through value-added services and nonmonetary benefits , particularly as life and health coverage continue to converge .
In Asia and Europe , life insurance companies are already offering administrative support for medical visits , health management , and telemedicine . Going forward , these companies could also partner with ridesharing companies and hotels to provide transportation to doctor visits or accommodations for loved ones in times of need .
Nonmonetary benefits Nonmonetary benefits can also address the risk needs of policyholders . For customers concerned with the cost of living in retirement , life insurance companies in Asia and the United Kingdom are replacing financial payouts with guaranteed placement in senior living communities .
Such services give insurers access to fee-based earnings , an alternative revenue stream that could be rewarded by investors . At the same time , fee-based earnings introduce more complexity vis-à-vis sales and after-sales support . Ultimately , earnings potential will be shaped by not only customer demand but also companies ’ abilities to upskill distribution talent and develop unique economic solutions for distributors .
Profitability Trends continued on page 14