Personalise, innovate, reinvent: advice for life insurers
Consultancy McKinsey has outlined three ways in which life insurers can re-establish a central partnership in customers’ lives.
It says life insurers in developed markets have struggled over the past decade to achieve sustained growth, and shareholder returns have been uneven. The coronavirus pandemic has exacerbated these challenges and “potential customers question their value proposition”.
In a new report titled The future of life insurance: Reimagining the industry for the decade ahead, McKinsey says life insurance providers should focus on three priorities to help them chart a “more viable, higher-growth path”.
The priorities are: personalise every aspect of the customer experience, develop innovative product solutions and reinvent the capabilities of the organisation.
“To succeed in the decade ahead, [life] insurers must fundamentally rethink and transform their value proposition: from a provider of mortality risk protection to an orchestrator of healthier living – from a savings product manufacturer to a partner in financial wellness,” McKinsey says.
It says executives should focus on five imperatives:
- Analyse the markets (geographical, product, and demographic) in which they compete, and determine if there is a path to profitable growth;
- Evaluate the entire customer value chain to identify opportunities for increased personalisation in an ‘omni-channel experience’;
- Reimagine product design through the lens of a challenging rate and (in some cases) regulatory environment, while maintaining focus on the bottom line;
- Optimise in-force and closed blocks to enhance value creation and serve as a source of resources for new opportunities;
- Invest in the future of work and reskilling efforts to ensure preparedness for the decade ahead.
McKinsey says that in a world of rapid social and technological change, “one constant remains: the customer’s need for help in navigating their life stages”.