Life Insurance

Advancing the Value of ‘Standard of Living’ Insurance

Technology, the $22 trillion protection-gap and the talent needed to close it

by Neil Sprackling

Mr. Sprackling is President of Swiss Re’s Life & Health US Business and a member of the firm’s Americas Management Team. Visit www.swissre.com

The perceptions surrounding life insurance and the insurance industry aren’t too far apart: both are deemed “boring,” far from sexy; something society needs, but certainly not at the top of most people’s lists in terms of a career or investment choice.

Americans have an estimated need of $22 trillion in life insurance to maintain their standard of living if a breadwinner passes away. Even with such an alarming figure, consumers have been slow to take action and have continued to put off buying life insurance.

Thankfully, today’s technology is changing that. Throw in predictive analytics and consumer segmentation to the mix, and the potential impact on our industry to help close the life insurance protection gap doesn’t seem as insurmountable as it once was. Technology plays a large role to make this a reality – but even more so, the talent we need in our industry to lead the charge.

Technology and Smart Data

Despite its importance, few people actively seek life insurance. The excuses run the gamut from “It’s too expensive” and “I don’t see the value,” to “The process is so complex,” and “I don’t understand the products.” But as with all industries, data and technology are here to change the game. According to LIMRA’s 2017 Insurance Barometer Study, technology is shaping the way consumers think about life insurance and the way policies are now purchased.

As we move to a more consumer-centric approach to the way we market our offerings, we have the opportunity to reduce the friction of buying life insurance and changing perceptions regarding life insurance itself– from what it costs, to what it takes to get insured, and ultimately, that life insurance may be one of the most important purchases a consumer will ever make.

Today’s consumers not only demand simplicity; they want quick answers and solutions – and technology is here to deliver. Consumers are looking for transparency in the sales process in order to make empowered, educated choices in their risk protection. This is undoubtedly getting better with more online tools, help and chat lines and platforms that deliver a policy more quickly than ever before.

Following suit, insurers are rewarding and incentivizing policyholders for healthy behavior and even using predictive techniques to anticipate what kind of product a consumer might need, at the time that is right for them. Insurers are creating more touchpoints throughout a consumer’s life, and the further development of cutting edge technology such as wearable devices gives us the power to understand and anticipate consumer needs like never before.

While the use of data and predictive analytics to underwrite risk is nothing new in our industry, in today’s digital landscape, it’s taken on a whole other level. Making better use of data and analyzing it effectively has resulted in improved underwriting and more sophisticated client segmentation. Automated systems now perform screening functions, taking much of the cost and time out of underwriting a policy.

Future-Ready Talent, Now

Making better use of data and analyzing it effectively has resulted in improved underwriting and more sophisticated client segmentation

It should be our goal as insurers to keep up with technology so that we can leverage it to build the ideal customer experience, to effect change, and to help build better lives. But to make change happen, to break into new markets and create new products, we need the right mix of talent. We need data scientists, technology gurus and behavioral experts to sit alongside the squadrons of existing insurance technicians.

The challenge, however, is that we have allowed a generation gap to form. By 2030, nearly half of the current workforce in our industry will retire, largely in part because the number of insurance professionals aged 55 or older has increased by 74% in the last 10 years. By 2020, there will be 400,000 vacant positons. Add to this that in all industries – not just in insurance – organizations are fighting to attract a scarce technical talent pool. In the next year alone, global demand for technical and managerial talent will exceed supply by 50-60%.

With these tremendous shifts underway, we need to up our efforts in promoting the huge value of our products to consumers at large – just as much as we need to do a better job of “selling” the benefits of working in our industry as a whole to attract new talent. And we are making strides in recruiting future-ready candidates who demonstrate not only leadership or tech capabilities, but those who are attracted to limitless challenges and a desire to do good for society.

For example, to attract the next generation of employees – millennials and Generation Z – we understand that they are looking for flexible working schemes, want to serve a larger purpose, have career opportunities with vast learning opportunities and technological progress – all of which our industry clearly offers. In fact, our fastest growing pool of talent are data scientists – a clear indication of the future direction of our industry.

At my company, we have an effective campus strategy and close collaboration with target universities, like St. Johns University in New York, in addition to holding career fairs, presentations at schools and in class, like the captive insurance program at Butler University where we’ve held sessions in the past.

We’re also a sustaining partner of Gamma Iota Sigma, which supports investment in the insurance industry to ensure Risk Management Insurance courses are offered at various schools. As a result of our efforts, the amount and quality of candidates interested in job postings have increased exponentially.

Never more potential than now

The potent mix we have today between technology and the future workplace paints a very different world than the one I’ve known since joining the industry over thirty years ago, but our guiding principle remains the same: to help people.
We have never had so much potential to move the needle in closing the protection gap than we do right now. Technology and the smart use of data are great enablers, and the next generation of talent who share Swiss Re’s vision of making the world a more resilient place are the key to our industry’s sustainability and success. ◊