Go digital or go home: 10 benefits, life insurance and annuity trends for 2022

By Jan A. Cannon On Jan 17, 2022

TOP 10 TRENDS IN BENEFITS, LIFE AND ANNUITIES

1. INSURERS MOVE FROM DIGITALIZATION TO DIGITAL

AITE-NOVARICA SAYS: “Insurers’ efforts are shifting from creating an online presence to creating better customer and agent experiences. … Companies risk wasting time, money and intelligence if they simply digitize instead of going digital. To illustrate the distinction, businesses can digitize paper processes and fax activities by bringing them online. It’s not bad or wrong, but it doesn’t create a digital customer and agent experience. Scanning a complex insurance form with obscure insurance terms is not a great digital experience. It can save money and time (assuming a phone call isn’t needed to interpret the online form), and it can be “green”. But from the end user’s perspective, it’s not a digital experience. …2022 could be a critical year when insurance companies either get “true digital” or lose the battle. »

(Image: Anawt Sudchanham/Adobe Stock)

2. SAP IMPLEMENTATIONS TAKE A GREENFIELD APPROACH

AITE-NOVARICA SAYS: “Done well, greenfield’s PAS provides faster time-to-market and modernization by enhancing surrounding systems. …many insurers are constrained by a legacy SAP when trying to enter a new line of business (eg voluntary benefits), launch a new life insurance product (eg -indexed universal life) or to deploy a new distribution channel (for example, direct insurance). -to the consumer). One strategy to improve time to market for such companies is to deploy a new PAS solution as part of a new program or transformation program. When embarking on either type of program, insurers should keep in mind that they need more than just a new SAP. Dozens of systems surround and integrate with the PAS, and they must be taken into account. The insurance ecosystem includes essential components beyond what is available in the core functionality of modern PAS solutions, for example, illustrations, electronic applications, underwriting, policy printing, complex invoicing, and agent compensation and accreditation.

(Image: alphaspirit.it/Shutterstock)

3. DIGITAL HEALTH DATA AND PREDICTIVE METHODS ARE EVOLVING AND ADOPTING

AITE-NOVARICA SAYS: “Insurers need to automate processes, use alternative data for underwriting, and support point-of-sale decisions. The biggest challenge stems from limitations in technology infrastructure, such as easily accessible cloud platforms and APIs that can be used by distributors to communicate directly with insurer solutions. Many life insurers have built their processes piecemeal over the past two pandemic years and will need to direct their efforts towards stabilizing infrastructure and processes. The effects will not only be to meet changing consumer and retail expectations, but also to exploit new opportunities, such as insurance-focused digital sales.

(Image: Shutterstock)

4. ENROLLMENT FOR BENEFITS AND SERVICE CAPABILITIES GET ATTENTION

AITE-NOVARICA SAYS: “The ecosystem supporting enrollment in benefits can be difficult to navigate. Standards are lacking in the group space, and there is no clear path to standardization that insurers can follow to simplify a complex data exchange process. As difficult as it can be to manage all the data exchange within the ecosystem, the ability to communicate between the plan sponsor’s, subscriber’s and insurer’s systems is essential to ensure their coordination. … The use of data to make business decisions continues to mature. Insurers need capabilities such as reporting and analytics to understand group characteristics and resulting sales opportunities.

(Image: Rawpixel.com/Shutterstock.com)

5. PERSONALIZATION OF BENEFIT PLANS IS BECOME A NECESSITY

AITE-NOVARICA SAYS: “Employers will continue to evolve their benefit offerings, including leave policies, new products, educational services, wellness programs and flextime. Signing bonuses, paying off student debt and working remotely are also gaining popularity in the competition to attract and retain talent. Delivering the benefits people want and need will be essential for talent management in the future. The personalization of benefits will play a more important role for employers in the years to come. »

(Image: New Africa/Adobe Stock)

6. NEW ANCILLARY BENEFIT PRODUCTS ARE DIFFERENTIATORS

AITE-NOVARICA SAYS: “New benefits, such as those related to tuition waivers or childcare, could become key to attracting and retaining talent. Perquisites, which allow employees to tailor their plans based on their goals and time horizons, can create differentiation for carriers in an era likely to be characterized by high levels of competition and continued pressure on margins. All of this has important implications for technology investments and operating models.

(Image: PeopleImages/iStock)

7. INSURERS ARE LOOKING FOR CREATIVE WAYS TO ATTRACT AND RETAIN TALENT

AITE-NOVARICA SAYS: “Insurers will favor a talent retention and attraction strategy. This strategy includes developing a detailed training program that focuses on both the breadth and depth of the insurance ecosystem and how it is designed. This includes training for skills that are not readily available in the market. As new hires are trained in a company’s systems and technology stack, they can work closely with experts to gain insight into design decisions. … [A]As working from home becomes more prevalent, insurers will look to recruit new employees from a wider geographic area. This may be an opportunity to find resources with existing knowledge of assurance systems and processes. »

(Image: Adobe Stock)

8. ERM REMAINS A PRIORITY

AITE-NOVARICA SAYS: “Fortune Business Insights estimated the global cybersecurity market to grow to US$166 billion in 2021 and forecast it to reach US$366 billion by 2028, at a compound annual growth rate of 12% . All the tipsters expect the market to grow and grow over the next few years. Many insurers are concerned about this topic and are investing in technology and employee training. Cybersecurity practitioners are some of the most talented, educated, hardworking, and technically competent people in the industry, but cybersecurity risk is asymmetric warfare. One user clicking the wrong thing, out of curiosity or maybe laziness, but more likely multitasking, negates all investment in talent and training. Phishing tests will demonstrate that, regardless of level, skill or technical proficiency, a variety of employees will fail each test. Surveys indicate that financial services employees fail in a range of percentages. However, it only takes one person, which means that cybersecurity will continue to be at the forefront of discussions and investments in 2022.”

(Image: momius/Adobe Stock)

9. EMERGING TECHNOLOGIES EMERGING UNEQUALLY

AITE-NOVARICA SAYS: “For technologies such as artificial intelligence and machine learning, big data and no-code/low-code platforms, Aite-Novarica Group expects to see significant variations in investments and results. . These technologies will not be considered ubiquitous or table stakes. Companies will need to be very focused in their approach with use cases and vendors. Indeed, the L/A/B company that can successfully deploy an emerging technology can achieve enormous returns and outsized competitive differentiation.

(Image: Julian/stock.adobe.com)

10. CLOUD, DATA AND ANALYSIS ARE RECOGNIZED AS FUNDAMENTAL

AITE-NOVARICA SAYS: “Cloud computing has gone from being an attractive ancillary capability for some to a foundational foundation for many. Running data centers were once seen as differentiators for life insurance companies. Now, these would be widely seen as meaningless distinctions and diversions from the basic capabilities of running an insurance company effectively. Cloud computing is also redefining what disaster recovery and business continuity planning should fundamentally mean. A significant adoption of cloud-based services to support business activities during the pandemic has dispelled any lingering doubts about what cloud computing can do.

(Image: thodonal/Adobe Stock)

In April 2020, Rolling Stone magazine noted a number of older songs that were experiencing a resurgence in popularity during the first months of the pandemic. One of those songs was “Ooh Child” by The Five Stairsteps. With its jaw-dropping chorus of “Someday we’ll walk in the rays of a beautiful sun / Someday when the world will be much brighter”, the 1971 hit not only racked up 3.2 million total streams and a 72% increase in sales between March 12 and April 23, but rooted in a sense of optimism that better days were ahead.

Nearly two years later, that optimism seems to have faded. According to HealthCareInsider’s 2022 COVID-19 Attitude Survey, three in 10 Americans think the pandemic will never end. Around a quarter of respondents think remote working will be one of the permanent changes brought about by COVID-19, and 12% think wearing a mask in public is also here to stay.

The “new normal” is recognized in the Aite-Novarica Group’s annual report on life, pensions and benefits trends. “Increased awareness of mortality, physical distancing, remote working and talent shortages are among the key factors that have deeply impacted clients, advisors and insurers,” writes Manoj Upreti.

None of this is to say that traditional problems are a thing of the past. “The low interest rate environment, increasing regulations and long product development cycles still attract a lot of attention,” Upreti says. “This environment also presents opportunities to leverage emerging technologies, data and analytics to improve customer engagement and build lasting relationships; make it easier for agents to do business; and reduce operating costs and reduce risk.

From migrating to the cloud to going full digital instead of just digitizing, the Aite-Novarica Group has identified 10 trends that will shape the L/A/B space in 2022. See our slideshow above, and click here for the full report.