A new report by LIMRA offers insight into what will happen in the industry in 2017 and beyond. According to senior LIMRA researchers, five key drivers will shape the industry in 2017:
- The Changing Consumer
- Talent management.
In recent years, international, federal and state regulations have expanded their reach, proposing complex far-reaching rules that fundamentally alter product design and business practices. Most prominently is the regulatory shift towards transparency and consumer protection. As a result, financial professionals are examining how they interact with consumers, exploring how to demonstrate value and distinguish themselves. LIMRA research suggests financial planning and advice will shift from an “art” to more of a “science.” Financial professionals will have to expand their interactions with clients and rely more on technology.
One of the reasons the industry has to re-examine how it engages with consumers is because today’s consumer is changing. Advances in technology have enabled consumers to access to more information from several different sources to help them make purchasing decisions. For example, LIMRA research shows that 70 percent of life insurance shoppers conduct research online as compared to less than 40 percent in 2006.
More importantly, consumers are more diverse than ever before and their expectations, preferences and needs are just as varied. As a result, LIMRA researchers believe more companies will embrace a customer-centric model to accommodate their wide-ranging customer base. LIMRA has witnessed insurers focus more on the customer experience to develop a stronger direct relationship with their policyholders. These initiatives are leading to innovative product design and unique customer service ideas.
The study explores the many ways technology will offer not only greater efficiency and engagement but also opens up the potential for increased cyber security risks. The report points to blockchain as a particularly promising technology for the financial services industry. Blockchain is a decentralized public database, distributed throughout the world, which is constantly being updated and designed to be “hacker-proof.” LIMRA believes there are several potential uses for blockchain in the financial services industry, including underwriting, customer payment, policy administration and investment management.
LIMRA predicts companies will implement innovation on many levels – product design, customer engagement, distribution concepts, etc. Researchers noted that some of these concepts might already exist in other markets, however they will be new to the financial services industry. Companies need to be willing to take chances and risk failure in order to break new ground.
In terms of talent management, the study suggests companies will evolve their recruitment and retention programs to remain competitive in the industry. Roles will continue to change and in a few years, some current roles might be completely unrecognizable as companies take advantage of artificial intelligence and other technologies.
For more information on LIMRA’s 2017 Predictions, LIMRA members can read the full report.