“AI is coming for knowledge-based, white collar workers,” predicts LIMRA researcher

Life insurance industry needs to be ready for Big Data era, with a focus on recruitment of specialized employees, says industry body

“AI is coming for knowledge-based, white collar workers,” predicts LIMRA researcher
Each January, LIMRA releases its Financial Services Evolution Predictions Report. The year 2017 is no different, and one of the study’s authors believes the speed of change is set to ramp up. Scott Kallenbach is Research Director, Strategic Research at LIMRA and has identified some of the key developments to watch out for as life insurance moves fully into the digital era.

“If you look at technology, the advanced use of data analytics is going to help companies identify consumer purchase behavior,” he says. “We will see strategy that goes beyond just the demographics – it will look at what we call non-traditional sources of information. For example, a recent study at the University of Pennsylvania found that Twitter can predict heart disease rates within communities.”

That study showed that Twitter could indicate a community’s psychological well-being and thus predict rates of heart disease. Expressions of negative emotions such as anger, stress and fatigue in an area’s tweets were associated with higher heart disease risk, while positive emotions like excitement and optimism were associated with lower risk.

Such research suggests that the majority of businesses have barely scratched the surface of what social media can offer, and that is certainly the case in the life insurance space.

While this creates opportunities, it also means that those in the industry must be able to adapt to change.

 “Consumers are going online and doing their own research before they make a purchase,” says Kallenbach. “After they collect the information they talk to a sales professional, and often they are looking for validation. The sales professional really has to focus now on adding value.”

While the internet means those selling insurance are no longer the first point of call for product information, it does allow them to market to a younger audience. With penetration rates for life insurance on the decline, it will be an invaluable tool heading forward, believes Kallenbach.  
Also to consider is the fact that technology is advancing at such a rapid rate that platforms like Twitter and Facebook are already feeling like yesterday’s news. In their place are developments that until relatively recently would have been considered science fiction.

“Artificial intelligence is starting to creep in,” he says. “In January, we saw a life insurance company in Japan (Fukoku Mutual Life Insurance) replace 34 claim workers with IBM Watson. AI is coming for knowledge-based, white collar workers. AI will either replace people or supplement or assist them in their work.”

So with computer programs starting to fill in for humans, it means workers that actually breath air and have blood in their veins need to upskill. The LIMRA study identifies as much, stressing the need to hire people skilled in the language of this brave new world – analytics.

 “We hear a lot about Big Data right now, but in order to be able to do anything with it you need people with the analytical skills to pull out the insight of what it all means. So we need to find digital specialists and data scientists that can craft business strategy.”

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