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May 09, 2018

5 Tech Trends That Will Disrupt the Life Insurance Industry in 2018 & Beyond

You’ll be surprised: the number of middle class population (with income over $10 daily) will increase to 1.2 billion by 2030 creating an increased demand for life insurance policy, according to a report by PWC.  

In fact: a report by Allianz reveals that the global "insurance penetration rate" is likely to increase to 5.8% over the course of next 10 years.

But here’s the deal: this is also a time of massive and potentially disruptive changes. The number of internet savvy consumers will increase from 1.8 billion today to 5 billion by 2020 and they are likely to expect and essentially demand seamless accessibility, transparency and responsiveness from life insurance companies too.

What does this mean for life insurance companies?

Life insurance companies will need to evolve and adapt to the rapidly evolving and potentially disruptive set of insurance market dynamics. In order to tap into the huge pool of ever-so-connected insurance seekers, insurtech players will need to embrace the emerging technological trends of tomorrow to ensure multiple digital touchpoints, convenience, and personalized customer experience.

In this post, we are going to reveal 5 innovative and disruptive technological changes in the life insurance industry that are that are already making news across the globe… and are expected to go even stronger in 2018 and beyond.

Let’s explore!

Trend #1: Gamification is the New Talk in Town

The potential of Gamification has been tremendous. And as gamification is becoming popular with tech-savvy and younger customers, a large number of life insurers from across the globe are leveraging gamification techniques to spread awareness and about fairly complex life insurance policy wordings.

In a bid to reach out to insurance seeker in Indonesia, where life insurance penetration is less than 2% due to the lack of understanding about the benefits of life insurance products, AXA group launched a game called CrazyCash. Soon after its launch, the game became a viral hit generating 200000+ tweets for AXA. In just 5 weeks, this game attracted more than 225000 page views for AXA’s official website.

We’re likely to see more and more life insurance companies using gamification in 2018 and beyond. After all, gamification makes it easy to educate customers and creates brand affinity while convincing them to buy life insurance plans to hedge risks.

Trend #2: Wearable Tech is Still A Thing

Wearable technology is not new, but life insurance industry worldwide has not yet realised its full potential. But this underrated technology is all set to gain positive momentum this 2018 and beyond. In fact, experts believe that wearable tech market will grow stronger at a CAGR of 15.5% to reach $51.6 billion by 2022.

In 2017, we saw some big industry names such as State Farm Insurance and John Hancock pushing harder on the use of wearable and other sensor-based technology to generate relevant, measurable consumer data to facilitate accurate risk underwriting.

Given that 63% insurance professionals already pin down their faith upon wearable tech, it could mean that, soon, it could become a norm rather than an exception. And this realization is encouraging a lot of life insurance companies to embrace robust wearable technology to stay ahead of the curve in 2018 (and beyond).

Trend #3: Chatbot Technology will Make Waves in 2018

Last year, Chatbot technology was a big hit among life insurance companies worldwide. In fact, a report by Capegemini-Efma reveals that 75% of all life insurers are already investing or planning to invest in Chatbot technology in the next 3 years.

London based fintech firm – Certua and Canada based Teachers Life Insurance are in the process of introducing Chatbot life insurance services to identify customers’ risk exposure and underwrite accurate life insurance policy based on customers’ risk profile and needs. In the interim, Indian insurance aggregator, set up its first-ever conversational assisted Chatbot in 2017. The Chatbot technology contributes to 40% of company’s overall auto insurance sales.

We’re hopeful that Chatbot Technology will continue to make waves this 2018 and beyond. In fact, the demand for Chatbot technology is likely to be 5 times higher as compared to 2017. Remember, today’s ever-so-discerning consumers expect lesser wait time and seamless support for insurance advice and query resolution. 

Trend #4: RPA will Redefine Insurance Administration Process

This was a winner trend for life insurance sector last year and it’s still here, the RPA (Robotic Process Automation) technology. With steep rise in the demand of life insurance plans worldwide, there’s been a decided demand for robotic process automation for better policy administration, underwriting and claim settlement.

Earlier this year, Japan’s Fukoko Mutual Life Insurance embraced RPA system to calculate pay outs to policyholders. We’re sure it won’t be long before other life insurance companies too start deploying robotic process automation in order to increase productivity, fasten the claim resolution process and ensure advanced fraud detection.

Well, it was a major win for the life insurance industry in 2017 and it is still expected to the ‘Next Big Thing’ for 2018 and beyond too.

Trend #5: Blockchain Technology Will Become the New Norm

Blockchain technology is another 2017 trend on the list that is going even stronger this 2018 and beyond. It has made it easier than ever before to boost operational efficiency throughout the value chain, enhance operational transparency and ensure seamless data transfer between all involved stakeholders.

In addition, blockchain based technological solutions can make the claim process seamless and hassle-free for dependents and beneficiaries by using inputs from death registries. It can also help life insurance companies reduce their operational costs by automating back-office transactions.

No wonder, several life insurance companies are already exploring the potential of blockchain technology. In fact, insurers such as Nationwide Insurance, AXA group, and Penn Mutual have joined the blockchain advisory council (created by LIMRA) to explore and deploy blockchain technology based solutions in the near future.

Given all this, it would be no exaggeration to say that blockchain technology is all set to become the hottest technology trend for 2018.

Over to You!

So you just read about the 5 hottest technology trends that will disrupt the life insurance industry in 2018 and beyond. The increasing demand and changing customer behaviour is set to open doors to innovations and technologies that value consumer security, process simplification and easy accessibility.

Cheers to these exciting tech trends! May we see bigger, better technology trends in the life insurance industry in the years to come!
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