Transformative Trends Shaping the Insurance Industry

Although life insurance is essential for managing risk, supporting families, and preserving wealth, it isn’t typically regarded as an innovative sector. However, in our contemporary digital landscape, it is evolving and embracing technological advancements like many other industries.

“Nowadays, you can shop online and have groceries delivered to your doorstep. Insurance should be no different,” asserts Ryan Switala, head of Simple Life Solutions at Liberty.

This doesn’t imply that everyone will opt for life insurance through an app, similar to how not everyone shops online. It merely highlights the industry’s transformation and how emerging trends are reshaping customer perceptions, accessibility, and engagement with life insurance products.

Client-Centric Focus

Many innovations in the industry are fueled by a commitment to catering to specific client needs while streamlining their experience.

“Historically, the underwriting process for life cover has been lengthy and quite intrusive,” explains Mark Barberini, head of Comprehensive Insurance at Liberty. “This differs from making an investment, where you simply select your portfolio, invest your money, and it’s done.”

In the past, a customer would meet with an advisor who would assess their needs and recommend suitable coverage. The advisor would then gather that information and possibly return with various quotes and options.

However, the client would still have to go through an underwriting phase to establish their eligibility for coverage and whether they may face increased premiums due to specific risks.

“This experience is generally unsatisfactory, particularly today when people expect instant results,” Barberini states. “We’re moving towards underwriting decisions that can be made in 20 to 30 minutes, only subjecting customers to comprehensive underwriting if unusual risks arise. Ideally, this should be applicable in just 5% of cases, not 100%.”

This shift is enabled by technologies like facial scanning, which can quickly provide essential health information.

“Increasingly, customers desire a shorter, less intrusive process, which technology can facilitate,” Barberini adds. “This option may not suit everyone, as providing less information might result in higher premiums, but it is becoming increasingly feasible.”

The Role of Artificial Intelligence

Eventually, artificial intelligence (AI) is expected to play a more significant role in this arena.

“AI will give insurers access to a myriad of data sources,” Barberini notes. “It can summarize what that data reveals and generate insights that may not be immediately clear to humans. This will streamline underwriting processes.”

This advancement has the potential to make accessing life insurance significantly simpler.

“Much of the industry’s processes have been structured to manage the 1% of high-risk cases, often at the cost of the experience for the remaining 99% of customers,” Switala mentions.

“This focus has been crucial, allowing the 99% to benefit from a sustainable and cost-effective product through risk management.

“Nonetheless, there is a vast opportunity to revolutionize every aspect of the journey—from obtaining advice to completing applications and the entire underwriting process, where applicants traditionally had to answer a long list of medical inquiries. We have multiple opportunities to enhance that experience using data and AI for quicker, more precise insights.”

Simplification Trends

This underscores perhaps the most prominent trend in life insurance markets: a move towards simplification.

“Previously, conducting detailed medical assessments on simpler products may not have been cost-effective, but advancements in technology mean these can be incorporated without compromising customer experience,” Switala explains.

“This evolution enables us to introduce digital channels for accessing simpler products, making it more convenient for customers to secure coverage at an appealing price point.”

This trend is already evident for clients who require life insurance when acquiring home or car loans from banks, with the process transitioning to a fully digital format, allowing for immediate coverage.

Technology also allows for the development of solutions that reflect an individual’s unique risk profile.

“For instance, there is likely a strong correlation between someone’s banking and credit risk behaviors and their life insurance risk,” Switala emphasizes. “By leveraging that type of data, we can personalize underwriting and pricing significantly.”

Many insurers are also undertaking efforts to simplify their offerings. Liberty, for instance, had over 1,100 products across its investment and insurance portfolio just a decade ago; that number has now decreased to fewer than 70.

“No client wishes to receive a service designed 20 or 30 years ago when more contemporary options are available,” Barberini remarks. “Thus, we’ve been transitioning clients to more modern systems, ensuring they receive the same coverage, often with improved benefits.”

“Our philosophy is that technology enables us to balance efficiency with the vital aspect of empathy, which is essential for us at Liberty,” Switala states.

“Overall, we aim to provide fewer options that are more aligned with our clients’ needs and broader aspirations. We strive to be a more digital organization, where obtaining insurance is more intuitive, simpler, and ultimately adds greater value to our clients’ lives.”

Disclaimer

This article serves informational purposes only and does not provide tax, legal, financial, regulatory, accounting, technical, or other advice. It contains no personal recommendations. Despite careful preparation, no member of Liberty warrants the accuracy or completeness of the information presented and accepts no responsibility or liability in that regard. For financial advice and/or intermediary services, please consult your financial advisor.

Liberty Group Limited is a Licensed Life Insurer and an Authorised Financial Services Provider (no 2409), part of the Standard Bank Group. Terms and conditions, risks, and limitations apply.

About Liberty

Liberty is a wholly owned subsidiary of The Standard Bank Group and one of the largest providers of long-term insurance solutions for South Africa’s retail affluent market. With a strong and relevant brand for over 60 years, Liberty offers a comprehensive, market-leading array of products and services designed to help clients build and protect their wealth and lifestyle. This is supported by Liberty’s distribution force of 3,000 professionals, who provide customers with the knowledge needed to make financial decisions that add value throughout their various life stages. Liberty’s integration into Standard Bank creates synergies and advantages not only in South Africa but throughout the African continent, positioning Liberty as an indispensable part of a universal financial services organization committed to delivering exceptional customer experiences and superior value. Liberty’s wholly-owned asset manager, STANLIB, ranks among the largest retail unit trust managers (including money market) in South Africa, with award-winning capabilities in property and fixed income. Together with its market-leading offshore partners, STANLIB provides unique investment opportunities for clients. Liberty Group Ltd is a licensed life insurer and an authorized financial services provider.

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