More than half (55%) of life insurance brokers, carriers, and vendors expect technology innovation will speed the issuance of life insurance policies while reducing administrative tasks and paperwork typically associated with the application and approval process, according to a recent survey conducted during the NAILBA 35 conference in Dallas by Munich Re, US (Life).
Streamlining the process of obtaining and assessing policy applications is a key issue in the life insurance industry. Brokers were asked to rate the importance of nine topics to improve this process. While all of topics rated as important (average rating ranging between 3.84 to 4.02 on a 5-point scale), brokers indicated they would like a shortened, automated underwriting process for more policy types, policies with larger face amounts and increased issue ages. In contrast, brokers indicated shortening the complete policy issue time to two days or less, or as little as 30 minutes, is of relatively low importance.
With respect to rate classes, nearly 82% of brokers are satisfied with the current structure (e.g.; super preferred, select, standard, etc.). Only 18% indicated a desire to move to customized, non-labelled ratings similar to those used in auto insurance.
Of the life insurance carriers represented, a majority of respondents (57%) do not sell, or plan to sell, directly to consumers. Nearly half (47%) of representatives from these companies do not see direct-to-consumer as a core competency of their organizations. A substantial group (42%) also voiced concern over channel conflict. Of the respondents who indicated their company is interested in direct-to-consumer, 60% look to partner with another marketing company to deliver a digital consumer experience. The remainder state that they plan to develop their own processes in-house.
Carriers were also asked about their companies’ innovation initiatives. Of the carrier respondents, nearly a quarter indicated their company already has a dedicated innovation team. The remaining 42% indicated that innovation is a strategic initiative and that their company is investing in people, processes and technology to fuel innovation.
Vendor respondents were evenly divided regarding the effect that technology is likely to have on their business in 2017. Forty-one percent anticipate that technology will result in incremental changes, while another 41% see technology causing disruption that will affect carriers and consumers in the upcoming year. The remaining 18% indicated they did not see any effect, incremental or disruptive, caused by changing technology.
“Munich Re has significant resources developing and supporting innovation across the insurance industry,” commented Paul Myers, FSA, MAAA, vice president and actuary, reinsurance marketing. “It is natural that companies would focus first on ways to make the policy issuance process faster and easier, but we expect that technology will take us far beyond process improvement. We have our hands on the latest developments coming out of innovation hubs like Silicon Valley through our presence in the area and our sponsorship of the InsureTech and other verticals at the Plug and Play Tech Center.”
Methodology: Munich Re US (Life) conducted a survey at the National Association of Independent Life Brokerage Agencies (NAILBA) conference in Dallas, Texas from November 17-19, 2016. It is intended to represent the views of 131 attendees, representing agents, life insurance companies and vendors, who participated in the in-person interviews. Respondents answered questions based on the role they play in the industry. For a PDF of the survey results, click here.
About Munich Re: Munich American Reassurance Company, (Munich Re US (Life)) founded in 1959, is one of the largest reinsurers in the U.S. offering life and disability reinsurance to insurance companies throughout the United States. The company also writes group, credit and other reinsurance products. Headquartered in Atlanta, with an office in Chicago, the company is licensed, accredited or authorized in all fifty states; Washington, D.C.; Guam; and Puerto Rico.