All of these factors can help enhance and grow a relationship with the customer. A few weeks ago, Majesco released its annual Consumer survey report, Enriching Customer Value, Digital Engagement, Financial Security and Loyalty by Rethinking Insurance<\/a>. The report synthesizes the links between high-level customer trends and insurer opportunities that are supported by emerging tech and data practices. The paper serves as a valuable pointer toward areas of potential growth and impact through a new type of relationship with customers \u2014 a data-enabled relationship. <\/p>\n\n\n\n The Gen Z and Millennial generation have the potential to reverse the downward tide of life insurance ownership occurring over the last few decades and improve the gap of uninsured. From a high in the mid-1970s with 72% of adults and 90% of households with two-parent owned life insurance[ii]<\/a> to a new low based on LIMRA\u2019s 2010 life insurance study that found only 44% of US households had individual life insurance, marking a 50-year low.[iii]<\/a><\/p>\n\n\n\n Furthermore, a February 2017 LIMRA study noted that employment-based benefits (group and voluntary) life insurance covered more people than individual life insurance as of 2016. The opportunity for growing voluntary benefits is reinforced in a recent analysis that found 50% of North American employers currently not offering voluntary benefits are considering adding them, and 40% who do offer them are looking to add additional benefits.[iv]<\/a><\/strong><\/p>\n\n\n\n There is considerable opportunity for increasing uptake of voluntary benefits, with just 17% of Gen Z and Millennials and 15% of Gen X and Boomers currently having any coverage. Among the types of voluntary benefits of the highest interest are traditional benefits like health, dental, vision, and life insurance as reflected in Figure 1.<\/strong> The level of interest in life coverage from Gen Z and Millennials is remarkably high, and one area where their interest matches the level of interest from Gen X and Boomers.<\/p>\n\n\n\n The broadening view of financial wellness also opens the door to offering new voluntary benefit options including auto, homeowner\/renter, and identity theft, particularly among Gen Z and Millennials. This group also shows twice the level of interest for pet insurance and student loan assistance, while both segments share similarly strong levels of interest in legal services.<\/p>\n\n\n\n Figure 1: Voluntary benefits consumers would enroll in if offered by their employer<\/p>\n\n\n\n Ten years ago, group and voluntary benefits and portability wasn\u2019t even a discussion. Most products and core systems weren\u2019t designed with rich individual capabilities, including portability to an individual policy. Now, many insurers have shifted gears and are leveraging data to better know the individuals within group plans, help them identify the right products for them, and meet their needs for portability. Insurers can now pave product paths from employer to employer or employer to individual — and the opportunity to retain customers and provide consistent risk coverage through their life journey.<\/p>\n\n\n\n This is crucial because of the increased fluid state of employment across all generations. Portability and flexibility of benefits, including offering more individual products or turn-on\/turn-off benefits for Gig\/contract employees, are now imperative in the competition for talent. Recognition that employees are no longer likely to remain with a company for 20-30 years, requires a rethinking of the benefit plan and specific product design who have different lifestyle needs.<\/p>\n\n\n\n Interest in portability is extremely high as you can see in Figure 2.<\/p>\n\n\n\n Figure 2: Interest in new benefit plan options<\/p>\n\n\n\n The desire for flexibility is further highlighted by seeking alternative options and simplicity for dental, vision, and hearing benefits for both generation groups. Offering employees the latitude to spend a pool of funds on whatever procedures and providers they choose, rather than being limited to the defined plan is of high interest with 81%-90%.<\/p>\n\n\n\n In the past, insurance companies could be rightly accused of being impersonal. People were policies. Policies lived in books of business. An insurer\u2019s main concern was \u201chow is this book of business doing?\u201d An energized era of customer focus has shown insurers how offering niche, personalized products, services, and experiences will align with customers\u2019 specific risk needs, using their personal data. From an increased interest in life, critical illness, and disability insurance to telematic and cyber insurance and more, customers want insurance products that assess their personal risk, lifestyle, and behaviors.<\/p>\n\n\n\n Today\u2019s customers have opened up to the idea that their data \u201cbuys\u201d them better products, services, personalized pricing, and a customized experience. <\/strong>(See Figure 3.) <\/p>\n\n\n\n Gen Z and Millennials outpace the older generation by 24% to 32% in willingness to share or use personalized data about them from a wide variety of new, non-traditional sources. Data from over-the-counter purchased drugs, prescription drugs, and fitness trackers lead with 75% willingness as compared to an average of 49% for the older generation. Quickly following are grocery purchases, general purchases, genetics, and DNA data at an average of 67% for Gen Z and Millennials as compared to an average of 38% for the older generation.<\/p>\n\n\n\n Both examples highlight the significant gaps not only in willingness but in expectations that if they manage their lives well from risk, they want to be recognized and rewarded.<\/strong> Given the top-of-mind issues of inflation and finances, it is likely that the cost of insurance and whether to buy it or not is a key factor. Insurers have a significant opportunity to meet the needs and demands of customers, particularly the younger generation who are more likely uninsured, by leveraging their data for personalized pricing.<\/p>\n\n\n\n Figure 3: Interest in new data sources for life\/health insurance and voluntary benefits pricing<\/em><\/em><\/p>\n\n\n\n Traditional product-oriented strategies, however, handicap insurers. Instead, insurers must consider a product to be inclusive of the risk product, value-added services, and the customer experience. This will meet customer expectations for delivering value. Part of that value comes from providing risk prevention and mitigation capabilities and services that help customers avoid loss, dramatically redefining their customer experience.<\/p>\n\n\n\n Gen Z and Millennials are excellent targets to meet this demand. Their interest level for value-added services is extremely high at 72%-85% as reflected in Figure 4. Gen X and Boomers likewise indicate interest from 43%-65%, suggesting more targeted interest areas. The inclusion of value-added services will soon become a table-stakes play to attract and retain this generation of customers. Insurers must consider innovative approaches to deliver extended value to the risk product such as discounts, alerts, wellness apps, and more.<\/p>\n\n\n\n Figure 4: Interest in value-added services with life\/health insurance and voluntary benefits<\/p>\n\n\n\n Complexity and out-of-date insurance processes, particularly with distribution, impact the growth and profitability of almost every line of business. As a result, there is a shift to refocus on the \u201cbuying\u201d over \u201cselling\u201d approach, through a multi-channel strategy that meets customers where and when they want to buy. What is striking (see Figure 5), is how willing customers are to buy outside of traditional channels.<\/p>\n\n\n\n New and high-tech channels (Google, Amazon, Facebook, Apple) show a divergence between the two generational groups, sometimes sizeable as reflected in the 50% reference line in Figure 5. Gen Z and Millennials show the starkest contrast, with every channel \u2013 traditional, new, and high-tech \u2013 surpassing the 50% threshold.<\/p>\n\n\n\n Figure 5: Interest in channel options for life\/health insurance<\/p>\n\n\n\n Another view on how the generational segments align and diverge can be seen in Figure 6 where the horizontal axis represents Gen X and Boomers, and the vertical axis represents Gen Z and Millennials channel preference ratings. The size of the bubbles reflects the magnitude of the gap between the two segments and the bubble colors represent the type of channel (traditional, new, high-tech).<\/p>\n\n\n\n The top 3 traditional channels with the smallest bubbles (insurance website, agents\/brokers, affinity groups) are in the upper right-hand corner indicating the same preference level for both generational segments. Moving left, Gen X and Boomer ratings rapidly decline while Gen Z and Millennial ratings remain in a tighter range. At the same time, the gaps between the generations grow larger indicated by the increasing bubble sizes.<\/p>\n\n\n\n This view highlights top channel opportunities by generational segment, extending the market reach and driving growth.<\/p>\n\n\n\n Figure 6: Generational alignment on interest in channel options for life\/health insurance<\/p>\n\n\n\n For customers in any age range or demographic bracket, loyalty isn\u2019t something to take for granted. Personalization and data use will only be truly effective in an environment of close contact and frequent personalized communication. Today\u2019s L&AH insurers need to prioritize connection and relevant communications that show true concern for their customers\u2019 lives, health, and safety.<\/p>\n\n\n\n Even if your organization chooses to sell embedded products through outside partnerships, your ability to keep track of policyholders and improve services and relationships will be a key to solidifying your space in the market. Traditional methods for tracking customer data aren\u2019t suitable for today\u2019s mobile and active customers. Majesco\u2019s Core Suite for L&AH<\/a>[DG1]<\/a> <\/a>, Digital Enroll360 for L&AH<\/a>, Distribution Management<\/a>, and our analytics solutions<\/a> can provide your company with a flexible framework to capture and keep a new generation of customers. You\u2019ll improve insights while improving relationships and best of all, you\u2019ll prepare to place new products and services at the points where relationships are built.<\/p>\n\n\n\n To read more about customer trends in insurance, be sure to read Majesco\u2019s latest report, Enriching Customer Value, Digital Engagement, Financial Security and Loyalty by Rethinking Insurance<\/a>. <\/p>\n\n\n\n [i]<\/a> Wearable Healthcare Tech Trend Driven by Millennials, PYMTS, December 27, 2022, https:\/\/www.pymnts.com\/technology\/2022\/wearable-medtech-revolution-driven-generation-z-millennials\/<\/a><\/p>\n\n\n\n [ii]<\/a> Dahl, Corey, \u201cA brief history of life insurance,\u201d ThinkAdvisor, September 9, 2013, https:\/\/www.thinkadvisor.com\/2013\/09\/09\/a-brief-history-of-life-insurance\/<\/a><\/p>\n\n\n\n [iii]<\/a> Ibid.<\/p>\n\n\n\n [iv]<\/a> Howe, Barbara, \u201cA Fresh Look at Voluntary Benefits,\u201d Corporate Wellness Magazine.com, https:\/\/www.corporatewellnessmagazine.com\/article\/a-fresh-look-at-voluntary-benefits<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Some history in life insurance for you. A life insurance product that sold in 1982 had a \u201cnew\u201d discounted premium for non-smokers. This was revolutionary \u2014 tying a personal behavior to underwriting a life policy premium. Oh, how we have advanced since then! What\u2019s possible now goes so far beyond that, yet the idea is…<\/p>\nL&AH \u2014 An opportunity for a new kind of relationship.<\/h2>\n\n\n\n
![\"\"](\"https:\/\/staging.majesco.com\/wp-content\/uploads\/2023\/02\/Fig_1-23-02-09.png\")
<\/figure>\n\n\n\n\u201cWill you follow me wherever I go?\u201d<\/h3>\n\n\n\n
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<\/figure>\n\n\n\n\u201cYou want to use my data? What do I get in value?\u201d<\/h3>\n\n\n\n
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<\/figure>\n\n\n\n\u201cShow me your product; show me my perks!\u201d<\/h3>\n\n\n\n
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<\/figure>\n\n\n\n\u201cWhere are you when I need you?\u201d<\/h3>\n\n\n\n
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<\/figure>\n\n\n\n\u201cStay in touch.\u201d<\/h3>\n\n\n\n
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