Life insurers must adapt to tech innovations

As personal devices allow people to monitor their own health, life insurers must be responsive to change in the industry

Life insurance is a deeply entrenched industry with a vast and complex product selection. This means some insurers have resisted change in the past, but according to an article published on Raconteur, that may be changing.

“Life insurers will soon find themselves in a technological-shaped future that is customer-centric,” reads the article Moving with the times: why life insurers must adapt. “If the industry makes better use of technology, it will make life insurance accessible for large numbers of people who have none or too little.”

An example is the growing movement towards personalized medical care. Fitness wearables have allowed the creation of reward-for-fitness programs that have become popular in several markets. Mobile apps have also enabled “mecosystems”, whereby individual patients can use digital lifestyle data from wearables and phones to augment their electronic health records.

“Individuals will begin to develop rich intelligence about their everyday health from data on exercise, sleep, mood, diet, heart function and more. Personal information like this is likely to prove as predictively powerful as the medical data traditionally used by insurers,” said the piece.

With new technology, there’s an opportunity for consumers to have solutions from providers tailored based on their personal data. They may also connect with others with similarly aligned health and life risk coverage concerns.

Of course, this can’t happen without life insurance companies accepting disruption in areas of risk selection, administration and claims processing to the benefit of customers. Blockchain technologies may be used to reduce redundancy in paper transactions while decentralizing administration. Robotic algorithms mal also may be used in the future to deliver direct-to-consumer, affiliate, or social media advice.

Customers have already expressed willingness to play their part in this future. A 2015 study by Deloitte shows that among those 25-34 years old and 35-44 years old, 77% and 72%, respectively, would like to purchase insurance via their smartphones. The same survey shows 49% of respondents are willing to share data with health insurers, as opposed to 11% and 40% for those who are undecided and those not willing, respectively.

“While the basics underpinning life insurance will remain in place for many years to come, how people access it, the incentives it provides and its cost will all be shaped by technology,” said the piece.

Related stories:
New Manulife life insurance program rewards healthy living
Wearables market to hit US $5bn by 2019, led by fitness trackers