Digital transformation, like time itself, cannot be measured in absolute terms. The definition of true transformation varies by industry and even by individual Organization. While the life and annuities (L&A) sector has been a digital laggard, not a digital leader, that is starting to change — proving that organizations in all industries still have an opportunity to digitize and transform.
Life insurers’ shift toward digitization kicked into high gear at the start of the pandemic, according to research from consulting firm NTT Data, which found L&A organizations made one year of digital transformation progress within the first 90 days of the pandemic lockdown. This trend must continue for organizations of all kinds to succeed and survive, according to David Nicolai, chief commercial officer for SE2, a third-party administrator of technology services for L&A insurers.
“The future hinges on the adoption of technology-based business models and continued digital transformation,” he said. “Cultivating this digital-first mindset is what will separate the industry leaders from the also-rans.”
Nicolai offered three examples from the L&A industry of how adopting a digital-first approach will help organizations and their leaders to attract and retain customers, enter new markets, innovate their core business, and stay competitive.
L&A insurance has long been something many consumers buy and essentially forget about. That’s because historically, the policies remained static from the time of underwriting throughout the lifetime of the customer, even if the policyholder’s circumstances changed. Insurers rarely reached out to customers to check-in or offer support. If the policyholder wanted to contact their insurer, they would have to carve out time for a phone call, even for changes as simple as updating beneficiaries.
Today, mobile-first consumers — particularly millennials, the largest generational group in today’s workforce and the oldest of whom are entering their 40s — prefer a low-friction digital experience. And consumers of all ages want organizations to offer customized buying and support, no matter the product. Deloitte notes the new L&A customer “seeks out on-demand and personalized products and services.”
Consumers additionally are not interested in doing business with companies that sell them a service and disappear, only contacting the customer to update payment information or send a bill. Research from SE2 found almost three-quarters of Americans who have life insurance (72%) say they would like to hear from their life insurance company more regularly throughout the duration of their policy.
Organizations need to meet the demands of today’s consumers, and that has led to the rise of digital customer engagement tools. These platforms make it simpler for consumers to learn about a company and its products and services before purchasing and offer organizations the ability to connect with their customers via seamless, user-friendly digital experiences, even post-purchase.
“These digital platforms and tools help organizations stay engaged with their customers, creating a more dynamic relationship via meaningful touchpoints,” Nicolai said. He cited Next by Pacific Life, supported by SaaS engagement platform Life.io Engage, an example from the insurance industry. Life.
