Outlook 2022 for the life and health insurance sector

The workplace, as we know it, has changed dramatically since the onset of COVID-19, which continues to accelerate digital transformation initiatives, especially among companies in the life insurance and insurance industries. health insurance, necessitated by the mandate to meet new and growing customer demands. .

At the same time, we are witnessing the “Big Resignation” as employees reflect on their current professional situation and make important decisions about their future career choices. HR benefit managers are also overwhelmed by the enormity of policies, portals, etc. confused. But, what if all lines of business were available in one place? What if they were portable and available at the flick of a switch? This is where employee benefits are heading in 2022.

Given the current landscape, I see four major trends shaping the life and health insurance industry in 2022 that will most certainly dictate the ability of carriers to remain competitive, if not viable.

1. New offers for today’s “new” employee

Today’s workers want flexibility, the ability to save and, in many cases, the chance to work for themselves as individual entrepreneurs or ‘workers on stage’. In doing so, however, a large number of these self-employed workers will no longer have access to social or collective benefits.

This new standard presented companies with a major conundrum about how they can not only compete but also actively recruit and retain talent, providing the flexibility to allow employees to work from home while attracting them with NEW benefits. attractive that will save them money.

In 2022, the provision of expanded benefits and highly personalized products that have never been offered before, such as pet insurance, student debt coverage, annuities, and auto or home insurance. / tenants, will allow employers to be more competitive and attractive to current applicants or employees or those on the fence. Millennials want to save first and foremost, and these non-traditional benefits will indeed be very appealing to these employees and fulfill their mandate to empower them to save more.

2. The rise of coretech

In 2022, insurers will need to focus on improving their technology if they want to stand out from the competition, especially agile insurtechs. To be better prepared for the “unforeseen” and to adapt quickly to continuous changes and challenges in the market, insurers must be equipped with flexible, open technology capable of supporting rapid integrations in various industries. and, above all, to be a central customer.

In recent years, insurance companies have invested heavily in insurtech. For insurers, the advantage of partnering with insurtechs is that they can complement their existing product portfolio or simplify internal operations quickly and inexpensively without having to develop internal expertise or applications themselves. . Insurtech to date, however, has achieved transformation on a relatively small scale via stand-alone projects or point solutions, and continuing to innovate in this one-off, loosely connected way will ultimately become too much to manage.

To capitalize on its full potential, insurers must connect insurtech to their core business, which will provide them with a solid foundation that will grow with them. However, most insurers have legacy systems that are not designed to adapt to the same. What we need is a new generation of cloud-native microservices and API-based core systems, or “coretech,” that are customer-centric by design. With coretech, insurers can seamlessly integrate insurtech solutions into their operating systems to realize their full potential.

Insurers will rapidly accelerate adoption of these solutions in 2022. Coretech has the ability to strengthen the new ecosystems that bring together core operations and insurtech innovation, which equates to extreme value.

3. Emergence of customer-centric ecosystems

The needs of consumers have changed and no business can meet all of their demands. Insurers have historically taken an “outside-in” perspective to determine how they can best integrate into consumer ecosystems. However, as 2022 approaches, insurers are moving towards a customer-centric perspective to create better, more personalized experiences that meet the myriad of consumer needs.

Because no one partner needs to build and orchestrate all the components, the ecosystem approach accelerates innovation, with one company’s innovation efforts favoring all others. To capitalize on their full potential and succeed with ecosystems, incumbent insurers must fully connect insurtechs to their core business. To do this, insurers must create a new generation of technological platforms; a system capable of quickly connecting, disconnecting and reconnecting with other systems, platforms and partners. These coretech platforms will enable continuous reformulation of ecosystems as customer needs, expectations and preferences evolve.

4. The convergence of life & non-life lines

2022 will be marked by the convergence of Life & Health and Life & Wealth. We will first see a convergence with the Workplace advantages which will then have repercussions on Life & Health. This convergence is all about transparency, protection and providing the one-stop-shop experience that today’s consumers actively seek. It offers a holistic picture that lets consumers know they are insured, covered and protected.

In 2022, insurers will make a sustained effort to expand their product portfolios, as mentioned above, to become more “sticky” with consumers. They will put more emphasis on streamlined shopping journeys that make additional data-driven product / service offerings that are attractive to customers and drive revenue growth and customer retention. Retention increases with each additional product that customers buy. Full-stack insurtechs, such as Lemonade, and major incumbents are pursuing this model with vigor and success.

In summary, we are going through a difficult time in the life and health insurance industry and the hurdles we face show no signs of abating. That said, there are a number of prophylactic measures carriers can take NOW to ensure that they remain viable, if not profitable, as 2022 approaches. The insurers who make the transition to digital ecosystems will be the ones who will remain competitive in this new Ordinary. They rightly see this transformation not only as an investment in their own future success, but, more importantly, as a successful response to the changing needs of their valued customers.

Samantha chow is the world leader in the Life, Pensions and Health market at EIS, an insurance software company that enables leading insurers to innovate and operate like a technology company: fast, simple, agile.