{"id":60963,"date":"2020-08-13T14:59:42","date_gmt":"2020-08-13T18:59:42","guid":{"rendered":"https:\/\/staging.majesco.com\/?p=60963"},"modified":"2022-11-09T19:36:53","modified_gmt":"2022-11-10T00:36:53","slug":"life-insurances-new-occupation-protecting-life-health-wealth-and-lifestyles","status":"publish","type":"post","link":"https:\/\/staging.majesco.com\/?p=60963","title":{"rendered":"Life Insurance\u2019s New Occupation: Protecting Life, Health, Wealth and Lifestyles"},"content":{"rendered":"\n

It has been a long time since I took Chemistry as a pre-med student in college \u2013 yes I was pre-med before switching to a math and computer science major!  I loved science and I remember the experience. I can\u2019t recall many of the formulas or compounds. But I remember the labs \u2013 especially the all-night ones. I remember mixing chemicals and I remember the role of the catalyst. No matter what you had in the tube or the beaker, we always had to watch out when we added the catalyst. It was the game changer. It was the one that could set the classroom on fire. The catalyst took all of the primary chemicals and created a quicker reaction. Poof.<\/p>\n\n\n\n

A catalyst, according to its definition, accelerates a chemical process without itself being affected. If you think about it, COVID-19 has acted as a sort of digital demand catalyst.<\/p>\n\n\n\n

In our last blog<\/a>, we talked about reading the signs of what is to come in the life insurance industry and we talked about connecting the dots. If we look at the trends closely, we can make out a picture of where the life insurance industry seems to be headed. Too much is changing not to notice. COVID-19 has added an extra variable \u2013 a catalyst \u2013 that has accelerated and pushed insurance to the point of reaction.<\/p>\n\n\n\n

No test scenarios could have accomplished what COVID has accomplished in six short months.  In fact, Microsoft CEO Satya Nadella stated in April, \u201cWe\u2019ve seen two years\u2019 worth of digital transformation in two months.\u201d[i]<\/a> COVID has compressed timeframes for digital utilization as it has ignited a rush for digital capabilities. It is speeding up a demographic and customer engagement shift that was already in process.  That is a catalyst!<\/p>\n\n\n\n

We have not seen such a rapid shift like this in our lifetime, one that will demand core systems that will adapt to customer needs and behaviors \u2013 moving between jobs regularly, seeking on-demand offerings, looking for value added services, buying benefits that can port to individual insurance and full digital engagement. These trends are tied to the new dominant insurance buyer of the digital era<\/strong>.<\/p>\n\n\n\n

Who are the new dominant insurance buyers? How will they change the nature of insurance?<\/strong><\/h2>\n\n\n\n

In Majesco\u2019s latest thought-leadership report, Rethinking Life Insurance: From a Transaction to a Life, Health, Wealth and Wellness Customer Experience<\/strong><\/a>, we use our recent consumer survey to paint a picture of this dominant insurance buyer as we chart the similarities and differences between demographic groups. For the purposes of our reporting, we place the segments into two large \u201cSuper Segments.\u201d Gen X and Boomers fit into one segment \u2013 the older generation that has been the foundation of growth for the last 50+ years. And the younger segment – Gen Z and Millennials who represent the next generation of buyers who expect digital-first engagement, products and business models.  <\/p>\n\n\n\n

Some interesting insights regarding the younger generation set the stage for a different view on expectations and engagement.  Currently, the younger generation rents at twice the rate of the older generation and is two times more likely to live with parents\/family or friends\/roommates, as seen in Figure 1. However, they are also 80% more likely to have children under 18 in their household. Yet, they represent a strong segment increasingly ready for insurance as they form new households and raise their families, replacing the older generation as the coveted insurance buying segment.<\/p>\n\n\n\n

Figure 1: Demographic profiles of the generational super segments<\/em><\/p>\n\n\n\n

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These segments identify how insurance\u2019s dominant buyers are changing, particularly their expectations, usage and perception of life insurance. The urgency of adapting to Millennials and Gen Z is reaching a critical tipping point. Next year, Millennials overtake the older generation.  And by 2025, the combined Gen Z and Millennial generations will dominate the 30-60-year-old sweet spot for insurance \u2013 a complete flip in dominance in the next 5 years.<\/strong><\/p>\n\n\n\n

Insurers unprepared for this new dominant insurance buyer and their extremely different needs and behaviors will increasingly find they are no longer relevant.<\/em><\/p>\n\n\n\n

Opportunity Within the Dominant Market<\/h2>\n\n\n\n

As we have been pointing out recently in our webinars<\/a> and blogs, insurance\u2019s focal shift from transactions to experiences is going to result in a wide range of growth opportunities. The younger generation seems to understand the value of insurance and wants it.  However, they expect something that is personalized to them.  To get this, they are more willing to share personal data like health and exercise data (including real-time) to underwrite their policy.  They want value-added services.  And they expect a seamless, digital process. <\/p>\n\n\n\n

You may not realize it yet, but this is the generation we\u2019ve all been waiting for! The only drawback is the lack of preparedness and the swiftness with which this is unfolding\u2026now accelerated by COVID-19.  <\/p>\n\n\n\n

While L&A insurers needed to operationally improve prior to COVID-19, they are now more pressured to do so, both during and after the crisis.  The pandemic is rapidly exposing less than desirable customer experiences as insurers deal with paper-bound processes, non-digital post-service transactions, a rise in \u201cfluidless\u201d online life insurance purchases through new competitors, and the need for extra caution due to fraud.  At the same time, new risks have emerged that demand new products such as \u201cpay gap\u201d for employees unable to work during a shutdown, new health products and simple life coverages \u2013 either as individual products or voluntary benefits. <\/p>\n\n\n\n

To retain the customer and revenue, insurers must rethink their scope away from a life insurance transaction to a broader lifestyle experience across health, wealth and wellness that includes:<\/p>\n\n\n\n