Earlier this month, our team attended the ReFocus 2018 conference in Las Vegas. The conference brings together executives from the life insurance and reinsurance space to discuss challenges faced globally by the industry. This year’s theme focused on the impact of life expectancy and longevity on life insurance and reinsurance. While there were a variety of insightful sessions, the highlights below focus on the digital and technological opportunities discussed at ReFocus 2018.
Can blockchain drive transparency in the insurance industry?
B3i, formed by a group of 15 global insurers and reinsurers, believes the answer is yes. B3i stands for ‘Blockchain Insurance Industry Initiative’ and was founded to explore ways blockchain can improve the transparency of insurance transactions and in doing so, break the cycle of mistrust that exists in the industry.
Why is blockchain the chosen technology?
Panelist Paul Meeusen, Head of Distributed Ledger Technology at Swiss Re, explained that blockchain drives trustworthy data (and in turn, transparency). Something that is critical for contract certainty – a gap that B3i is trying to close. Since identity is driven by digital means in the blockchain world, contract participants can be 100% sure of the counter parties to the contract.
According to Andrew Flasko, Global Chief Technology Officer at SCOR, blockchain drives transparency because it provides everyone with the original, exact data, rather than copies that have been manipulated through various systems in the value chain.
As B3i continues to explore the possibilities of blockchain technology, we can hope to see improved speed and transparency of transactions in the industry. And according to panelist Ed Deuser, Technical Architect & Developer at RGA, one of the biggest elements of life and health insurance blockchain can help improve is fraud prevention.
In May 2017, Cookhouse Lab worked collaboratively with 15+ organizations to explore probable use cases of blockchain in insurance. Over a four-week period, the project team identified over 30 scenarios and subsequently Cookhouse Lab released three blockchain innovation sprints.
Where is your organization placing bets when it comes to investing in blockchain?
Genomics and its potential to benefit the life insurance industry
Another highlight from ReFocus 2018 was the discussion on Genomics and its impact on the insurance industry. Two of our Senior Underwriters recently explored this topic in our Underwriting Expert Series so we were excited to hear more about it.
The panelists including, Connor Landgraf, Co-Founder & CEO, Eko Devices, Tom Wamberg, CEO, Wamberg Genomic Advisors, and Mark Winham, COO, Wamberg Genomic Advisors shared some interesting stats on the topic:
When it comes to people using genetic testing, a Wamberg Genomic Survey revealed that:
- 62% of US respondents want their cancer genetically tested to find new treatments
- 79% of consumers would consider genetic testing to limit drug side effect
- 75% of consumers responded that genetic testing can help people live a longer/better quality of life
When it comes to the value of Genomic testing, the panelists shared the following:
- 42% of 1051 surveyed reported positive changes to their health behavior (dietary, exercise habits, supplements, non-prescription drugs, prescription drugs)
- studies show that cancer patients that have genomic testing can survive an additional 14 months
While genomics can benefit the industry by improving medical treatments, it was interesting to learn that their ability to predict disease propensity could also pose as a potential threat. In our Underwriting Expert Series, Garen and Elliott also touch on the potential of insurance companies being exposed to anti-selection (the tendency of those with high-risk jobs, avocations, or poor health to seek out insurance coverage).
What are your thoughts about the outlook of genomics and insurance?
Disrupting Insurance Distribution
Consumers today are constantly connected in the digital space and are very much involved in every aspect of their buying journey, from awareness through to advocacy. Because of this connectivity, consumers expect digital experiences from the companies they give their business to. However, just being digital is no longer enough – it is not the differentiator.
According to Clare Shih, CEO and Founder at Hearsay Systems, the future of distribution is two-fold: digital direct and advised. Digital direct means providing consumers with an instant way to connect digitally. Advised means providing a trusted advisor that can offer expertise and emotional guidance.
So how can insurers accomplish both?
Clare shared 5 lessons borrowed from the tech company playbook:
- Own your distribution channel – this gives control over the client experience
- Connect the dots – digital siloes are just as inefficient as manual processes, create a holistic experience and gain visibility on agent actions
- Help advisors increase frequency of client contact – client contact is the best driver of loyalty and a good net promoter score (NPS)
- Use people to train your algorithms – to help reduce the question of ‘am I talking to a person or a chatbot?’
- Hold business owners accountable for digitization – innovation is everyone’s job!
Perhaps Shih’s advice on a two-fold distribution strategy could help solve the problem brought up during the Former CEO Panel that life insurance buyers continue to be grossly under-insured.
The panelists posed the following questions:
- Can traditional agents make a compelling case for buying?
- Is the buying public even interested in working with agents?
- Do they just want an app to buy coverage, like they buy so many other things?
By applying Shih’s strategy, the buying public could get the best of both worlds – the emotional support of an agent but the convenience of an instant app. However, the question remains will they continue to be under-insured?
As new technologies and challenges continue to present themselves to the insurance industry, the adoption rate and investment into these new opportunities will vary from company to company. Despite the variances, it is evident that more organizations are placing high importance on improving the insurance customer experience by making their buying, underwriting, and claims process much simpler, more accurate, and painless.
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