US life-annuity insurers that better understand technological advances, such as the shift to purchasing insurance online, are in a position to seize competitive opportunities, according to the 2015 EY US life-annuity insurance outlook.
EY said successful insurers in 2015 should focus on some of the following issues:
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- Reposition distribution strategies to expand market opportunities: EY said digital and Internet-based technologies will continue to alter consumer expectations and behavior.
Given that consumers are increasingly purchasing insurance and savings products online, EY said to succeed in this evolving environment, insurers should reposition their products to fit new distribution models and customers’ online use and expectations.
- Develop simplified products to expand customer markets: EY added that insurers are reaching beyond the high-net-worth market to the mass affluent and middle market, where simplified products with modular riders tend to be more successful.
The global provider said more simplified base products and riders create a more acceptable risk profile for the insurer, while addressing current consumer concerns.
- Enhance data security: EY said data gathered in underwriting life insurance can be especially sensitive.
New IT practices such as cloud computing have increased the risk of a data breach, and regulators have been paying more attention to security. According to EY, insurers must therefore enhance their security efforts and develop enterprise-wide processes to control and monitor their third-party providers.
