As an agent or adviser, are you concerned about how the rise of technology and digitisation in life insurance will affect your role? Ms Christie Loustau, Senior Underwriting Consultant, Asia at RGA Reinsurance Company, is of the view that the future of advice will be a hybrid of both digital and human advisers. Here are some of the technology trends she identifies that may impact on life insurance.
The face of life insurance advice is changing, notes Ms Loustau. The Gen Y, or millennials, have access to the Internet almost all the time and spend up to three hours a day on their mobile phones. Thus, they expect to be able to do everything online, on a self-service basis if possible, and have a minimal wait-time when it comes to interaction with insurers. Instead of hearing back in two days, they like responses in minutes. They also expect products to be customised to their individual preferences.
While an Accenture study has shown that eight in 10 people in Singapore today welcome robo-advisory services (seven in 10 globally), Ms Loustau believes that behavioural economics will mean that human advice remain important, as life products are sold, not bought. For example, human advisers are needed to help people get over their natural loss aversion when it comes to buying, identify their individual risks, and identify the value of intangible goods, in particular--insurance being an example.
Nonetheless, agents and advisers should still pay attention to technology advancements which will affect their industry, and Ms Loustau highlights some to look out for:
Genomics advancements
People today can access their own complete DNA sequencing profile in a matter of days, at an affordable cost of around US$1,000. Some insurers in Asia are already looking into genetic testing for their clients. This may affect life and health underwriting decisions in future as they have a better idea of their client's health risks.
More knowledge about genetic profiling means that precision medicine can be administered, and medical treatment can be more effective than ever.
CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) is a new genome editing tool that allows scientists to edit genomes with unprecedented precision, efficiency, and flexibility. While it is still nascent, the possibilities of its applications are endless—some examples are eliminating diseases from the embryo stage, curing any disease with a genetic basis.
Wearables
Growth in the wearables market is expected to increase 35% by 2019. Several insurers today are already including wearable devices for wellness and rewards programmes, though there continue to be issues around accuracy and client compliance with use.
Nonetheless, the applications of wearables could increase with the amount of data that insurers will aggregate from these devices and ongoing wellness programmes. Next Gen wearables, which involve advanced medical grade devices, smart clothing and remote monitoring of body conditions, mean that even more accurate data can be collected. It remains to be seen how insurers will use the data in future and apply it to their policies and programmes.
Artificial intelligence and machine learning
A firm in the US, Lapetus Solutions, has come up with facial analytics technology that can estimate an individual’s key body data just via a selfie photo. It has already partnered with an insurer to provide life insurance quotes based on clients submitting their selfies on a website.
Digital algorithms like this are powerful and can grow even more so, with new life and health industry applications such as predicting future medical conditions like heart attacks or strokes. Algorithms, boosted via artificial intelligence and machine learning, can also become better than humans in picking up anomalies and outliers while crawling through insurers’ data, which can help insurers to prevent fraudulent claims.
Technology transforms insurance
Developments in technology like those listed above will be able to transform insurance across product development, underwriting, post-policy issuance (dynamic product pricing) and claims. But insurers have traditionally been burdened by their legacy systems and processes, so it remains to be seen how they can use data from technology effectively in their business, said Ms Loustau.
“The industry will change in ways in which we haven’t anticipated. Financial services as an industry has been slow to change and reluctant to innovate, but as expectations of customers are changing, we will all need to become more nimble and responsive if we are to remain relevant,” she concluded, speaking at the 1st International Training Summit for Life Agents and Financial Advisers.
The Summit was organised by Asia Insurance Review and sponsored by RGA Re and LIMRA.