Trends to watch: Life insurance tech

January 3, 2024 6:37 AM

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Digital Insurance reached out to insurance professionals about what to expect with life insurance technology.

The responses have been lightly edited for clarity.

Brian Poppe, senior vice president of income and wealth planning solutions at Mutual of Omaha

Brian Poppe, senior vice president, technology modernization, Mutual of Omaha

While the industry has been slow to adopt technologies like wearables, APIs and even the currently unpopular blockchain, each of those technologies will play a part in the life insurance industry going forward. We've seen carriers embrace wearables as an added benefit, and the current crop of insurtechs are utilizing APIs to pass data back and forth in a faster way than the usual batch processes. With the economic and venture market hardening, we'll see carriers start to acquire insurtechs, increasing both their tech capabilities and tech talent to adopt those technologies even faster, in pursuit of using that technology to collect data, better scale their operations, and serve their customers better than ever before.

Mutual of Omaha has started this journey by implementing several AI models to help us make better decisions, eliminating outdated technology, and building digital experiences to make our customers' and producers' lives easier. We're picking up the pace of innovation and technology and doing so in the right way, with a ground-up rethinking of our tech stack and an eye toward what customers will need in the future.

Luis Romero, CEO and founder, Equisoft

One of the biggest risks the life insurance industry will face is the changing workforce and the need to account for it. Many life insurance professionals — agents, brokers, sales, etc. — will be retiring, and insurers will lose all the valuable expertise and knowledge that personnel had. The result is a potential decrease in customer experience satisfaction and the need for life insurers to figure out how to continue delivering value to policyholders while continuing to upskill and train the younger generations.

This will also be exacerbated by applications like ChatGPT and Bard AI, both of which can educate clients and put them in a position to challenge insurance agents on their expertise and knowledge. This is where insurance technology companies will play a vital role — helping life insurers modernize by digitally transforming their policy administration systems and migrating data to make it more accessible. By doing so, life insurers will be able to harvest and leverage that data and use it in current and developing tech, which provide additional customer and agent experience benefits, meeting customers where they are now and where they'll be in the future.

Brittany Clements, managing director, American Family Ventures

Brittany Clements of American Family Ventures

I'm really excited heading into 2024 for the life sector. I think it has been a laggard to many of the other lines of insurance. Less than 5% of funding volumes have historically gone into that space, despite a significant portion of market and annual premium volume that it represents.

2024 is going to be an exciting year. I expect to see more funding volume there. Just given some of the companies that I'm seeing in the space, especially in the permanent life space. A lot of the carriers that I know in the space have been really bogged down over the past couple years with legacy systems, monetization and upgrading policy admin systems, those sort of things. It seems like a lot of that is coming to fruition and so I'm really excited to see the step change that occurs with all of that, plus some of the advancements with Gen AI and other technology shifts to enable more innovation across that category specifically.

Bethany N. Jansen, principle IT program manager, American Family Insurance

When looking ahead to 2024 in the life insurance industry, I anticipate a shift towards utilizing LLMs and embracing the opportunities for efficiencies AI provides. Life insurance can be complex from a documentation and rating standpoint, so it would make sense for us to use LLMs to look up internal documents to collate information and recommend next steps in the process. The ability to help synthesize information from multiple sources is critical and allows underwriters to "ask" the manuals to guide their thought process when dealing with complexities and/or co-mobilities.

Nathan Richardson, senior vice president, consumer division, CNO Financial Group

We're going to see a continuation of a trend that's been gaining traction since the mid-2010s – the sale of life insurance through online avenues – and I also think social media sites are going to continue gaining prominence as places where younger consumers will get information about various life insurance products.

Developing and implementing technology innovations, and attracting, hiring and retaining employees that have the skillsets to design new products and to support the business from a technical standpoint are some of the biggest challenges. From a consumer standpoint, the biggest challenge for life insurance companies in 2024 will continue to be related to improving the buying experience from a digital and underwriting perspective. Like we've seen with the buying experience with most goods and services across industries, more consumers want their purchases of life insurance to be simple and quick, getting an underwriting decision in minutes or hours instead of days or weeks.

Like years past, in 2024 and beyond, the life insurance industry will continue to seek ways to educate and reach the 100 million American adults who are either uninsured or underinsured, per findings from LIMRA.

Brooks Tingle, president & CEO of John Hancock

Digitization enables us to better anticipate our customers' needs, engage with them more frequently, and take a more active role in helping them live longer, healthier, better lives.  In 2024, you'll see John Hancock integrate even more data, analytics, and emerging technologies into our Vitality platform, so that we can play an even more meaningful role for our customers as a life insurer. 

I think 2024 will usher in even more collaboration between insurtechs and legacy insurers. The reality is that we need each other and can push our industry forward in many areas such as mobile, digital, and behavioral sciences when we collaborate strategically. We've seen insurance companies shut down insurtech divisions and insurtechs back away from trying to be insurance companies — there will be new opportunities for collaboration as both sides focus on what they do best.