ATLANTA--(BUSINESS WIRE)--More than half (55 percent) of life insurance brokers, carriers, and vendors expect technology innovation will speed the issuance of life insurance policies while reducing administrative tasks and paperwork typically associated with the application and approval process, according to a recent survey conducted by Munich Re, US (Life), a leading reinsurer.
Streamlining the process of obtaining and assessing policy applications is a key issue in the life insurance industry. Brokers were asked to rate the importance of nine topics to improve this process. While all of topics rated as important (average rating ranging between 3.84 to 4.02 on a five point scale), brokers indicated they would like a shortened, automated underwriting process for more policy types, policies with larger face amounts and increased issue ages. In contrast, brokers indicated shortening the complete policy issue time to two days or less, or as little as 30 minutes, is of relatively low importance.
With respect to rate classes, nearly 82 percent of brokers are satisfied with the current structure (e.g.; super preferred, select, standard, etc.). Only 18 percent indicated a desire to move to customized, non-labelled ratings similar to those used in auto insurance.
Of the life insurance carriers represented, a majority of respondents (57 percent) do not sell, or plan to sell, directly to consumers. Nearly half (47 percent) of representatives from these companies do not see direct-to-consumer as a core competency of their organizations. A substantial group (42 percent) also voiced concern over channel conflict. Of the respondents who indicated their company is interested in direct-to-consumer, 60 percent look to partner with another marketing company to deliver a digital consumer experience. The remainder state that they plan to develop their own processes in-house.
Carriers were also asked about their companies’ innovation initiatives. Of the carrier respondents, nearly a quarter indicated their company already has a dedicated innovation team. The remaining 42 percent indicated that innovation is a strategic initiative and that their company is investing in people, processes and technology to fuel innovation.
Vendor respondents were evenly divided regarding the effect that technology is likely to have on their business in 2017. 41 percent anticipate that technology will result in incremental changes, while another 41 percent see technology causing disruption that will affect carriers and consumers in the upcoming year. The remaining 20 percent indicated they did not see any effect, incremental or disruptive, caused by changing technology.
“Munich Re has significant resources developing and supporting innovation across the insurance industry,” commented Paul Myers, FSA, MAAA, vice president and actuary, reinsurance marketing. “It is natural that companies would focus first on ways to make the policy issuance process faster and easier, but we expect that technology will take us far beyond process improvement. We have our hands on the latest developments coming out of innovation hubs like Silicon Valley through our presence in the area and our sponsorship of the InsureTech and other verticals at the Plug and Play Tech Center.”
Munich Re US (Life) conducted a survey at the National Association of Independent Life Brokerage Agencies (NAILBA) conference in Dallas, Texas from November 17-19, 2016. It is intended to represent the views of 131 attendees, representing agents, life insurance companies and vendors, who participated in the in-person interviews. Respondents answered questions based on the role they play in the industry. For a PDF of the survey results, click here.
Munich American Reassurance Company, (Munich Re US (Life)) founded in 1959, is one of the largest reinsurers in the U.S. offering life and disability reinsurance to insurance companies throughout the United States. The company also writes group, credit and other reinsurance products. Headquartered in Atlanta, with an office in Chicago, the company is licensed, accredited or authorized in all fifty states; Washington, D.C.; Guam; and Puerto Rico.
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. In the financial year 2015, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.1bn on premium income of over €50bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €28bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the leading insurance groups in Germany and Europe. ERGO is represented in over 30 countries worldwide and offers a comprehensive range of insurances, provision products and services. In 2015, ERGO posted premium income of €17.9bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments (excluding insurance-related investments) amounting to €215bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.