Despite COVID-19 accelerating digital transformation, technology is cited as the biggest challenge for life insurance executives, according to a new survey from LIMRA and Boston Consulting Group.
About four in 10 executives cited technology as their company’s greatest challenge, twice as many as in 2019. Those surveyed suggested that digital automation, data science and analytics were the top technologies needed to progress their companies’ business forward. Six in 10 executives also suggested that customer service technologies, modernizing legacy systems and mitigating cybersecurity were crucial.
Alison Salka, PhD, senior vice president and director of LIMRA Research, said it struck her how many executives cited technology as their companies’ number one challenge.
“The future is now,” Salka said. “Life insurers can no longer take baby steps in their efforts to adopt digital technologies. Not only do their customers expect to be able to interact whenever and however they choose, younger generations of workers will demand to work in a digital-enabled work environment. To be competitive in today’s market, life insurers must modernize every aspect of their business from marketing, sales and distribution to product development, servicing and claims.”
According to respondents, several COVID-19 related changes are likely to be long-term including the increased use of digital applications and enrollment tools, balancing remote and onsite working models and shifting toward hybrid distribution (digital and human).
Salka said the executives surveyed stressed the importance of growth outside current markets and that there is a need to find new approaches to customer engagement, attracting a future workforce and providing productivity tools to employees.
“I think we will see some companies flourish under this ‘new normal,’ and others, unfortunately, will struggle,” Salka said. “We are likely to continue to see M&A, especially from non-traditional players from insurtech and private equity. I think the pandemic illustrated how responsive and adaptive our industry can be. With that in mind, I think we can expect to see innovation and continued growth for our industry.”
