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InsureTechRe-imagining the Customer Experience
Southwest Actuaries Club
June 2017
Shall We Play a Game?
The Life Insurance Challenge
People want more life insurance, but don’t buy it:
40% of Americans who HAVE life insurance
don’t think they have enough.
70% of households with children under 18 say
they do not have enough life insurance.
Yet they insure their cell phones!
LIMRA estimates the unmet life insurance
need at over $15 trillion.
83% say they don’t buy life insurance
because they believe it is too expensive.
But they overestimate the cost by 3 times
US Population and Number of Life Policies
Closing the Coverage Gap
100
150
200
250
300
350
1945 1980 2013
US Population (in millions)
Number of Life Insurance Policies
LIMRA 2015
Back to the FutureThe more things change, the more they stay the same.
1992 2017
Music on Albums and CDs
Movies on VHS or DVD
Dozens of TV Channel Choices
On Cable & Antenna
Travel Agents
AAA Triptik
Banking in branches
Music on iTunes and Spotify
Movies Netflix and iTunes
Thousands of TV Choices On
Satellite, YouTube, Amazon, HULU, etc.
Expedia, Orbitz, Upside, Hopster
Google Maps, Waze
Banking online
For a generation of consumers who grew up in an online
and mobile world – it is hard to understand why they can’t buy,
and manage, their policy anytime from anywhere…
Customers and distribution
Roughly half of US agents are set to retire in
the next few years
Shifting household demographics dilute the life
insurance value proposition
Three-quarters of new customers
under age 55, and 4 in 10 life
insurance policies are purchased
by buyers between 25 and 451
GenXers & Millenials prefer digital
and mobile buying
By 2017, there will be 200 million
smartphones in the US – the need for
24/7 access will become pervasive
Today’s younger consumers expect a seamless,
high-tech buying experience
Latent demand & underserved middle market
Disruptive technology & new data
Vast amounts of new data sources – Rx,
electronic medical records, wearables, social
media, genetics, etc.
Analytics that enable targeted marketing
towards less risky applicants by
providing a more personalized and
meaningful digital experience
Predictive analytics & algorithms to
streamline and accelerate the
application process and
underwriting
New technology platforms to engage
consumers post-issue
Advanced medical research and testing
leads to less invasive underwriting
methods
Key external trends in the life insurance industry
1) Source: LIMRA.com
5
More and More Households UninsuredAnd increasingly turning online for information
6 Title of presentation
55%
50%
28%
25%
28%
40%
20%
22%
32%
2016
1998
1960
Household Individual Life Coverage
No Members Covered
All Members Covered
Some Members Covered
Managing Change is Critical to Successsful Growth
0% 10% 20% 30% 40% 50% 60%
Product Innovation
Adapt to Transaction Based Sales
Adapt to New Buyer Dynamics
Adapt Existing Distribution
Accelerated Underwriting Models
Issues to grow business effectively
NMG Survey 2015
Clients’ Perspective
7
Pace of Change in Life Picking UpMore Change in the Past 25 Months Than the Prior 25 Years
• Focus on Predictive Analytics
• LexisNexis, TransUnion, Deloitte, Home Grown
New Data and Models
• No longer for specific products…
• …but as part of underwriting process in general
Focus on Automated and Accelerated Underwriting
• Different underwriting paths based upon risk profile
• Puts predictive models & automation to work
Underwriting Triage
• Including bringing in data streams from wearables, etc.
• John Hancock – Vitality / Life Rewards
Increasing Focus on Lifestyle and Other Factors
• New platforms launching
• Driving a focus on end customer experience
FinTech Interest in Life Insurance Space
Looking for New Ways to Stratify Risk
A/E relative to 2008 VBT S&U table
PM Score Range TotalAll Risk Classes
Excludes Declines
Preferred Plus &
Preferred
Standard Plus &
StandardTobacco Declines
200-299 219% 166% 138% 184% 171% 371%
300-399 142% 118% 105% 116% 144% 280%
400-499 107% 93% 77% 104% 107% 233%
500-599 89% 80% 67% 85% 98% 195%
600-699 75% 67% 57% 72% 86% 169%
700-799 71% 64% 55% 69% 78% 183%
800-899 65% 57% 46% 65% 73% 192%
900-997 57% 51% 45% 62% 26% 202%
Total 95% 82% 68% 86% 105% 229%
# of deaths 11,983 9,326 3,161 4,346 1,1819 2,657
Risk stratification
based mainly on
medical info
Risk stratification
based on
non-medical info
Today's Accelerated Undewriting
Moving Toward "Agile Underwriting"
Data
Data
?’s
Data
?’s
+ / -
Issue
Policy
Decline
Risk Assessment and Underwriting
Increasing Underwriting Agility
• Not the same process for everyone
• Different types of information for each applicants
• Demands some degree of automation
Data Elements Will Change – Not Just How We Access Them
• Some historical Underwriting data elements will continue
• But - some will stop being utilized
• New data elements and metrics will replace them
• Will require a great deal of R&D and analysis
No One Company Can “Do it All”
• Partnerships and alliances will increase in importance
• Insurance industry not well positioned for technological revolution
• Data is a valuable currency
Products and Ratings Will Evolve
• Movement from discrete rate classes to a continuum
• Not locked into initial assessment based upon a point in time
• Health and lifestyle over time will drive product performance
What is the Road Ahead?
12
InsurTech
Distribution
• Focused on generating quality digital leads
• MGA, MGU models
Customer Engagement / Customer Journey
• Relentlessly focused on the customer experience
• Want to control all aspects of customer engagement
New Sources of Data
• Structured health data available at the point of sale
from multitude of sources
• Social, financial and other sources of data for marketing
and triage purposes
Focused on Disruption
13
Critical Technologies That Will Shape the Next Decade
Source: McKinsey Global Institute
New Tools on the Way
Lots of Opportunity for New Data
Life Insurance is sold, not bought
“Well yes. For me to buy an
unnecessarily complex product
through a confusing, outdated, and
non-transparent product experience
– someone is going to have to sell
me on that…”
Changes to Distribution
New emerging distribution platforms are
relentlessly pursuing an end-customer centric
experience
Generally targeted at the current non-insurance
buying population thus initially not creating
significant channel conflict
These will be fully digital platforms engaging with
customers on mobile devices serving them 24
hours a day / 7 days a week
New Channels
19
What You Say Matters!(so does how you say it)
Just to be clear…
A Better Way?
Hi. To keep this terminal clean, it's closed
to visitors from midnight until 4 a.m. every night.
Ticketed passengers are always welcome.
Thank you.
with credit to Seth Godin
My Own Encounter
Don’t forget your sauce!
We are happy to offer your choice of
complimentary sauce with our chicken
and onion rings.
For larger orders such as 10 or 20 piece
nuggets or 5 strips – we are happy to
provide 2-3 sauces per item.
If you would like to add additional
sauces, we are pleased to do so for just
10 cents each.
The New BreedCustomer Feedback
5 Stars: Uber for Life Insurance – an instant, high
quality experience
Before getting covered by Ladder, I'd been putting off
buying life insurance (independent of the coverage
provided by my employer) for over a year. Before Ladder,
I'd tried to go through traditional life insurance brokers
and the process was frustrating and spammy. I was
put on auto-dialer lists and couldn't go 24 hours
without a call to schedule a "lifestyle interview" or a
"personal survey."
Conversely, I signed up for Ladder and had temporary
coverage for $1MM in less than 15 minutes. No phone
calls. No scheduling appointments. There is an
associated medical screening that needs to be conducted
in-person, but it's all scheduled online with Ladder's tools.
The New BreedCustomer Feedback
5 Stars: Streamlined process, good materials, competitive rates
I'm reasonably healthy, young, uncomplicated, and didn't have life insurance
until I applied for it through Ladder, because I felt like it would necessarily be
a complicated process to get it, and I didn't feel the need. But with a growing
family, my wife and friends gently nudged me to get life insurance, so I found
Ladder.
It really was a very easy process. It made it easy to compare rates for different
coverage amounts, and then the application questionnaire was easily completed
in less than 20 minutes. I had compared against some other online "meta-
search" tools and found the rates competitive, so I didn't feel like they're trying
to up-charge people who want a quick clean process... And since Ladder sells
its own insurance, you don't have to be redirected to another site to go through
another full application process like you would have to with some of the other
sites out there.
….
The New BreedCustomer Feedabck
5 Stars My recent experience with Haven Life...It was very good!
Recently, I was laid off from my job. I had been on group life insurance for 19
years and then when my coverage ran out, I had no Life Insurance to protect
my wife and kids. I did some research and shopped various sources and saw
that Haven Life was very competitive and offered on-line acceptance for
insurance. After filling out the initial application, I did need to have some blood
work done to confirm that I was in good health. They scheduled an
appointment within 2 days and the nurse came to my home. It was really
easy. They had some follow-up questions that I answered and from the time I
started the process to the time I was insured, it took about week or so. It was a
VERY efficient process and communications were clear and concise. I
received a 15 year term policy at a competitive rate in an open and
transparent process. I'd recommend Haven Life to anyone looking for life
insurance.
The New BreedCustomer Feedback
5 Stars – Easy and informative
Nice and easy. Informative and transparent
5 Stars – Fast and easy
Fast and easy! No hassle. Thank you for not making me
jump through hoops.
5 Stars
I was delaying getting life insurance because of the long and manual
process. Life insurance was the only type that you couldn't purchase
online - you could do quotes, but everything else had to be completed in
person and via paper. This is 2016! I then finally found Haven Life - it was a
new company, but owned by Mass Mutual which is A+ rated. Plus the rates
were less than all the other "brick & mortar" companies, and the signup
process was super easy! 15 minute application, instant approval, amazing
process! Definitely will recommend
Changing Perspective
Changing Perspective
Rooms like these...
...deciding what they want
The Sureify “Lifetime Platform” Enabling a Complete Digital Insurer
BUY NOW
Insurance Policy
Web and mobile
sales enablement
Mobile experiences
for policyholders
Insurer
engagement center
1 2 3
32
Social IntegrationStart integrating with policyholders
in real-time
Cross-selling CapabilitiesIncreases lifetime value of customers
by selling relevant products
GeolocationLeverage geolocation data to
better service your customers
Rewards & ChallengesKeeps customers actively engaged
Device-connectedEnables gamification
possibilities with health devices
Policy ManagementView, update, and engage
with policy information
Apply & BuyOnline policy purchase with
automated underwriting
Driving Continous EngagementPlatform can Enable Multiple New Ways to Engage Clients
33
Carriers can engage and reach millions of
policyholders with a push of a button
A Complete Digital InsurerEngagement Control Center
34
All engagement is controlled through the
Engagement Control Center contained within the
platform
Allows a carrier to manage all aspects of their
digital platform:
• Manage online sales
• Policyholder management
• Create and customize wellness plans
• Create education modules
• Push and create product cross-selling
• Analyze IoT data analytics
• Evaluate all app engagement metrics
• Push, email, text via dashboard
• Agent engagement module.
• Social integration analytics
Amara's Law
We tend to overestimate the effect of a technology in the
short run and underestimate the effect in the long run.
Looking Back a Decade
Looking Back a Decade
Looking Back a Decade
The Opportunity AheadAnd the Challenge
Need to increase focus on the end customer
While not alienating existing distribution
Technology is not the product, it’s an enabler
Connecting providers and those with need
Will be a difficult transition for some carriers
Channel conflict, legacy systems, and cultural mindset
Respect the pace of technology
Artificial Intelligence. Machine Learning.
Many may be fast followers But speed will be critical.
Some may draw a line and split their business in two
Modern growing company. Legacy runoff company.
Regulation to keep pace NAIC Innovation and Modernization
There will be a new order New brands will emerge. Some will fail.
The Life Industry's "Starbucks Moment"?
