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Insurtech 2.0 Delivers New Opportunities for Life Insurers

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The first wave of Insurtech development created a ripple of panic in the life insurance industry. Advisors would be disintermediated. Traditional carrier and distributor models would be disrupted.

Those fears turned out to be unfounded. Instead, digitalization brought the industry closer to its customers and accelerated the transformational journeys for all stakeholders.

Now, with the arrival of Insurtech 2.0, we’re at an inflection point‒ that promises to bring even greater benefits for insurers.

In a recent Life Accelerated podcast, Joel Albarella, SVP & Head of New York Life Ventures, spoke with host Anthony O’Donnell Executive Editor of Insurance Innovation Reporter about how the technology landscape is changing and what new opportunities it’s creating for insurers.

New attitudes provide a new direction for insurance technology

New entrants into the life insurance technology ecosystem are focused, not on disruption, but on crafting bespoke solutions to specific challenges.

“I think those innovative founders, and many of them are my friends, have created an aspiration for the entire industry of what the purchase experience should look like. I think that's going to persist. I think that's going to be a really strong north star that was created for our industry.”

‒ Joel Albarella, SVP & Head of New York Life Ventures

The newest round of tech entrepreneurs realizes that solving difficult, highly unique problems in the life insurance value chain can enable them to create successful businesses that grow rapidly due to interest from the very large institutions in need of those solutions. This marks a transition from the old, competitive disruption mindset held by founders who wanted to turn over the apple cart and take market share from traditional insurers to a newer, more cooperative enablement mindset.

3 new tech solutions to life insurance challenges

Organizations realize that the industry lags behind other verticals in providing the real-time, right now, hyper-personalized interactions that consumers have come to expect. To address this shortfall, many insurers have made developing an enhanced CX top priority. It is a key driver behind their digital transformation strategy and much of the new investment in technology derives from that.

Apps and APIs‒lets meet in the cloud

Stakeholder enablement through technology requires integrating best of breed solutions to create the right experiences for customers and agents. Carriers are now able to elevate their consumer-facing offerings by bringing together API connected, cloud-based solutions that take sales, services and claims processes to new levels.

And the spirit of tech-fueled partnership that enables these accelerated workflows is forging bonds between all stakeholders in the channel. Carriers, brokers and advisors are sharing premium and commission feeds, automating clunky processes like manual paramed workflows, and accelerating policy onboarding through integrations between planning, illustration, quoting and eApp tools.

Data and analytics‒ the rise of the ‘middle office’

A lot of the value created by new bespoke technology solutions will come from operations that happen in between back-office solutions like Policy Admin Systems (PAS) and front-end tools like portals. These ‘middle office’ solutions are innovative apps that enhance data analysis and are increasingly powered by machine learning and AI. They improve an insurer’s ability to harmonize data and access better data sources, creating opportunities to improve critical processes like pricing of new risk assets or analysis of risk assets that are already on the books.

Underwriting solutions

New technologies that impact specific elements of the policy life cycle will make a big difference on carriers’ CX initiatives. Innovation in areas like underwriting will accelerate policy approval times and increase the effectiveness of actuarial decision-making.

At the same time, low code/no code PAS offers greatly increased flexibility and puts that agility in the hands of the business owners. There will be a reduced reliance on IT for implementing process improvements and making product enhancements.

"Businesses are going to be better enabled to obtain insights at scale. Those walls will be broken down and technology will be much more embedded within the business."

‒ Joel Albarella, SVP & Head of New York Life Ventures

Insurtech 2.0 – creating a new path to digital transformation for all life insurance stakeholders

The shift from new insurtechs’ loitering with intent to disrupt versus taking an active role in solving specific challenges faced by insurers involved in digital transformation is accelerating the pace of change in the industry.

New approaches, tools and technologies are enabling all stakeholders to radically improve CX, harness the full power of their data to improve decision-making and automate critical processes that have traditionally created frustrations and been a drag on new business creation.

The trend going forward is not about new entrants disrupting traditional industry players but about harnessing new technologies and solutions to forge connections between stakeholders that will enable us to solve the biggest problems facing the industry.

To find out more about how New York Life Ventures is harnessing the power of emerging life insurance technologies check out this podcast episode.

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