Category Life Insurance

Three macro trends you can't ignore

05 March 2019 FMI



Many people view technology as a way to increase speed and streamline the customers experience, yet so often this is at the expense of product quality. This is not our approach. We believe product quality comes first, and that technology should be used as a powerful enabler to attract more people to the industry, and to help you, as advisers, give advice more efficiently and to support your sales process. The future of insurance is still going to be largely bought and sold through an intermediary, and advice is still an important part of the process, so we're using technology to support that process, rather than compete with it.
Digital health tools have exponentially increased public awareness and customers are now more in tune with their health than ever before. Innovations such as genetic testing can make a huge difference to our longevity early on, by offering preventative measures as well as supporting early treatment. On the one hand, this is good news for the industry as people make the right decisions around how to improve their health. On the other hand, this will have a major impact in terms of underwriting, product design, pricing, policy wording and claims with the risk that South Africans will know more about their health than insurers, and may use that information to select against their provider. This trend may have a significant bearing on the insurance industry and we will need to review how we address these challenges going forward.

The nature of the job market is changing - there are occupation types that never existed just a few years ago. And it's predicted that by 2020, half the US workforce will consist of independent workers. So people are performing jobs that never existed previously and they're doing it on their own terms.
This has a major impact on our industry - we need to make sure we can offer quality income protection to all of these individuals regardless of the type of job they have or whether they're salaried or an independent worker.
Young South Africans are driving the freelance growth we are seeing through changing mindsets around employment options. We need to make insurance simpler and more relevant for a younger generation who may not need life cover because they have no dependents but who certainly need income protection because they have their entire future income to protect.

And as consumers become more tech-savvy and knowledgeable, we need to add value by offering products that are transparent and tailored to their needs. Medical advances, improving nutrition and education all have a significant impact on our longevity. As our life spans continue to increase, insurers need to look at accommodating a shift in client life stages, needs and retirement expectations.
The consequence of all of these developments is that our clients are constantly raising the bar on service delivery and customer experience. None of these trends can be seen in isolation and they all have a major impact on each other and the insurance industry. We are only starting to grapple with these issues as an industry and it remains to be seen, as these trends continue to grow and advance, how we adapt.

For us at FMI, it's a reminder that our core purpose of protecting people's dreams remains more important than ever - and for us as an industry to connect with individuals on a human level, to simplify insurance, to be transparent and to protect a person's income above anything else, no matter what they do for a living or their age.
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