Life Insurance Reimagined: From Direct Debits to Customer Relationships and Ecosystems

To differentiate themselves, life insurers need to offer value-added services, a streamlined customer experience, and leverage technology to mitigate risks. Ecosystems are the answer.

Give customers a great experience, and there’s an excellent chance they’ll be loyal. They might even tell their friends. That’s what every insurance company is chasing. Yet so many customers feel disappointed or disconnected from their life insurance company—to the point that most can’t even tell you who their life insurance company is or the type of life insurance they have.

What makes for a good life insurance experience? How can life insurers create real connections that feel human? And what role do partnerships and ecosystems play in the conversation?

During a panel discussion that you watch below, leaders from EIS, Yulife, and Generali set out to answer these questions. One of the more controversial topics that came to the forefront was whether proactively engaging with customers is even a good idea for life insurers. Insert gasps, eye bulges, and jaw drops here.

One observation summed up this old-school mentality:

“Many [life insurers] don’t want to talk to their customers, less the customer remembers that they’re paying this direct debit every single month and cancels,” said Sam Fromson, co-founder and COO of Yulife, critiquing an old-school way of thinking.

For a time, this stance was logical enough. Life insurance traditionally has been a “push industry,” where carriers sell the policy, it’s set to direct debit, and the customer more or less forgets about it. However, as Bob Dylan famously lyricized, “The times they are a-changin’.”

Across all walks of life, customer expectations have shifted dramatically with the advent of the smartphone, subscription-based services, wearables, and emerging technologies. Life insurance has been relatively slow to adapt but isn’t immune to the shift, as our panel highlighted. I encourage you to watch the full recording because it provides a cross-section of perspectives from an insurer, an insurtech, and EIS.

The most important takeaway, in my opinion, was that life insurers need to deliver value beyond traditional life insurance policies. After all, the policyholder isn’t the one who receives the benefit. They can, however, benefit from a better customer experience. Here are some of the highlights of our conversation:

  • All the panel members agreed that life insurers are better positioned to create a “win-win” model than any other insurance industry players. By promoting, educating, and inspiring customers to live longer, happier, healthier lives, it’s good for them. And it’s good for the insurer as it reduces risk.
  • Aline Brugger, head of products and services at Generali, shared her belief that one of the more effective ways to deliver value-added services fast is by collaborating with tech startups. In doing so, Generali doesn’t need to build from scratch. Instead, they can be faster and more economical in delivering more value, such as a micro-savings program targeted to younger people.
  • Fromson also spoke about the advantages of partnering. He explained that Yulife has been an ecosystem player from the start. The company’s vision is to provide a gateway for customers into a connected set of best-of-breed products—from cycling apps to diet and nutrition apps. By creating a connected experience, they’re able to reward customers for the things they’re already doing and incentivize them to take that extra step to improve their overall well-being.
  •  Fromson also talked about how Yulife strategically chooses the partners they work with and the model through which they work with them. Watch the webinar recording to learn more.
  • One important question that an attendee asked was around the monetization of value-added services. Will customers pay for the services? Or is the value to the insurer more indirect, realized through differentiation and brand equity? Aline and I shared our perspectives on monetization in the webinar recording.

As life insurers seek to broaden their horizons and support customers on their life, health, wealth, and wellness journey, technology has a clear role to play.

Legacy Systems and Closed Architectures are Over

These legacy systems were designed around the policy—not the customer. They were never built to connect with external partners, which is a deal-breaker given the importance of ecosystems discussed above.

I would love to add something here about ecosystems. Ecosystems are the new opportunity to differentiate. They give the insurer the chance to create unique experiences and offer unique products. Let’s be honest with each other. Life insurers aren’t that different from one another. They are all offering the same products to the same kinds of people with the same goals. This is an opportunity to be unique and present a value prop or strategy that sets you apart from the competition.

The Era of Coretech Digital Insurance Platforms Has Arrived

At EIS, we refer to our digital platform as “coretech” because it shares its DNA with insurtech. Coretech is a combination of cloud-native technologies, implementation and integration methodologies, and insurance core systems architected for the future of insurance. Coretech is built with the microservices, APIs, containers, and event-based workflows necessary to support emerging business models in life insurance. Most importantly, it’s open and makes it easy for carriers to build and join life, health, wealth, and wellness ecosystems.

To learn more about how customer behaviors and motivations for life insurance are changing, download The Customer Compass: Navigating the Future of Insurance report.

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