The life insurance sector is poised for substantial growth and transformation as it heads into 2025, driven by advancements in technology and emerging trends highlighted by industry experts in recent discussions. As reported by Digital Insurance, a review of insights from prominent figures within the insurance field indicates a marked shift toward digital transformation, particularly in how life insurers operate and engage with their customers.
Ian Drysdale, CEO of One Inc, forecasts that the life insurance protection gap is expected to close significantly, with U.S. retail life insurance premiums projected to increase by up to 5% in 2025, according to LIMRA. He emphasises that the impending digital revolution will resonate particularly with younger generations, including Millennials and Gen Z, allowing insurers to adapt to the evolving expectations of a tech-savvy clientele.
Bill Pieroni, CEO of ACORD, notes that while direct sales in life insurance may face stagnation in the short term, the deployment of advanced AI technologies will be crucial in overcoming existing barriers. According to Pieroni, insurers will need to tailor their solutions and experiences to engage previously reluctant insureds effectively, potentially unlocking broader market opportunities.
The sentiment of a market ripe for innovation is echoed by Brian Carey, Senior Director of Insurance Solutions at Equisoft. He points out that many life insurance carriers have traditionally focused on addressing singular needs at the point of policy issuance. However, as customers navigate various life stages, there is a growing necessity for products that can evolve with changing demands, driven by robust tech stacks.
The current economic landscape has been favourable, with Coleman Johnson, SVP and Chief Underwriting Officer at The Mutual Group, indicating that life and annuity sales are thriving due to a healthy interest rate environment. He predicts that this positive trend should extend into 2025, encouraging companies to recalibrate their sales strategies in response to demographic shifts and changing consumer habits.
On the topic of technological advancements, Andrew Burge, Vice President of Life Insurance Business Development at Nationwide, stresses the importance of proactive technology adoption within the sector. He predicts that insurers are moving from a reactive stance to one of aggressive adoption of digital solutions, including e-commerce and AI, enhancing the overall customer experience. Burge highlights a significant shift towards simplifying the sales process, noting that what once took days or weeks for policy approvals may soon be accomplished in mere minutes through digital self-service options.
As technology continues to advance, Ted Epps, the Americas Life Insurance Technology Leader at EY, outlines a focus on leveraging generative AI to optimise various operational aspects. Epps suggests that improvements in data capabilities are necessary to take full advantage of Gen AI, especially in critical functions such as underwriting and claims processing.
In the group insurance market, there is an evident generational shift, with Millennials now representing more than 50% of the workforce. Chris Morbelli, EY Americas Life & Group Insurance Leader, points out that this demographic change necessitates tailored products and services that appeal to differing workforce segments. He anticipates that group insurers will adopt generative AI and digitalisation more rapidly than their individual market counterparts, enhancing both customer engagement and operational efficiencies.
Moreover, Erik Stockwell, Global Insurance Practice Leader for Life & Annuities at Genpact, reveals that life insurance carriers are likely to harness AI for automating enrolment processes, thus improving the onboarding experience for both brokers and customers. By reducing the need for manual data entry, insurers will be able to streamline operational efficiency, allowing personnel to concentrate on strategic initiatives.
Among other anticipated shifts, Rory Yates, SVP Corporate Strategy at EIS, suggests that insurers must address the looming deadline for legacy systems, which will drive a return to new technology investments. Additionally, Patrick Sullivan, SVP of Integrated Analytics at Munich Re Life North America, predicts an acceleration in underwriting transformations facilitated by electronic health records, which will enhance efficiency in risk assessments and speed of decisions.
As the life insurance industry continues to navigate both opportunities and challenges, including the volatile effects of medical innovations, the overarching narrative points to a sector in transition. Marc Giguere, President and CEO of Munich Re Life U.S., articulates the need for insurers to adapt rapidly, leveraging advanced technologies to sharpen risk assessments and improve accessibility for consumers.
The insights provided by these industry leaders depict a landscape where technological advancements will significantly reshape the life insurance market, offering an array of new products and services while striving to close existing protection gaps. The changes on the horizon for 2025 are not just likely but expected to redefine customer interactions and operational paradigms across the sector.
Source: Noah Wire Services