Life insurance issues remain the same 10 years on

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Life insurance trends and issues are the same today as they were a decade ago, according to a white paper just released by a global supplier of technology solutions.

Bravura Solutions undertook the research, Life Insurance Snapshot, in order to explore how important a role growing developments like the technological revolution will play in the future of life insurance in Australia.

It identified 10 major future trends in the life insurance industry that focus on operations, technology, product development, consumer behaviour, and overall innovation.

But the most surprising result of the research was that not a lot has changed, Bravura Solutions director Darren Stevens told Wealth Professional.

“The trends and issues being faced now are the same ones we saw more than ten years ago: poor claims experience, rising costs from stress and mental illness, pressure on group life pricing and legacy systems hampering product development,” he said. “The industry seems to cycle around every five to ten years on these same issues.”

Stevens said those who do not look to modernise are set to continue to cycle around these legacy issues that will stifle innovation and put pressure on costs and business retention.

But renewed interest in solving such issues, hand-in-hand with increased competition; will offer huge opportunities for those who want to modernise.

“As we saw with the banks, once one large player takes the brave move and makes the investment you see the others follow suit thereafter,” he said. “Life insurers need to pay heed to what adjacent and other industries are doing in these spaces. They will come under increasing pressure from consumers to match these modern service offerings.”

The white paper also predicts that longstanding companies are set to face increased competition from new entrants who have the luxury of not being hampered by legacy issues.

However, embracing modern technology could open up new ways to engage with and educate customers, increase addressable markets, and reduce operational costs, Stevens said.