October, 20208 IN MY V EWWe have seen a significant increase in the number of startups developing solutions specifically for the life insurance industry. Solutions generally focus on one of three main elements: improving the on-boarding journey for new clients; transforming the underwriting journey and driving ongoing engagement to offer personalized insurance offerings to clients. To date, however, the implementation of new technology far under performs the level of activity in the Insurtech industry. Most current implementations focus on either improving existing processes marginally or offering alternative value-add service solutions to existing customers, often through developing new digital health ecosystems. Given the amount of Insurtech activity, it's only a matter of time before there is a large-scale embedding of new technologies in the sector, and once implemented, rapid adoption is likely to follow. The question is how long it will take, and who will be first to make the required shifts in business practices? To answer this question, it's important to critically evaluate the life insurance industry and clear the hurdles standing in the way of such transformation. The reality is that until now, the life insurance industry has followed largely linear processes when issuing a new policy. A typical process takes three to six weeks and involves a sales agent; regulatory KYC processes; completion of lengthy application forms; medical, financial and a vocational underwriting; and eventually payment of a premium and issuance of a policy document. Underwriting processes were designed to ensure appropriate risk management using rigid processes relevant at the time of design, many years ago. Adopting a digitized, customer-centric journey often faces significant challenges and costs alongside incompatible older technology, hardcoded back-end systems, and tried and tested distribution processes.Once a policy is issued, an insurer's focus tends to turn to infrequent communication with policyholders around their benefits and costs of cover, and nearly non-existent engagement levels around the clients' needs, wants and likes. The development of digital health ecosystems aims to address this shortcoming by using data and lifestyle signals combined with artificial intelligence and machine learning to customize communication methods and promote appropriate platform services related to these insights. Long-term customer engagement levels are largely untested though, and true product customization is still some way off.To truly embrace technology in developing new processes acceptable to today's customers, insurers need to actively overcome three key features of our industry. Firstly, insurers and Insurtech companies alike need to be realistic around business cases for deploying new technology solutions. Most insurers are well-established and have built up significant blocks of in-force, long-term business. Using conservative ACCELERATING INSURTECH - FROM PIPEDREAM TO REALITY BY NICHOLAS VAN DER NEST, HEAD OF PRODUCT INNOVATION, LIFE & HEALTH, ASIA-PACIFIC, MUNICH RE [FWB: MUV2]Nicholas van der Nest
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