Tag Archives: Haven Life

Insurers Are Catching the Innovation Wave

As the June 30 deadline approaches for this year’s SMA Innovation in Action Awards, I’m looking forward to seeing the innovative strides that insurers and solution providers have made in the past year. The market is changing so quickly that adaptability is key.

The SMA Innovation in Action Awards recognize insurers of all types and sizes who are rethinking, reimagining and reinventing the business of insurance. In recent years, we have recognized a number of traditional, established companies that are propelling themselves forward. They have combined the best strengths of our industry today with the best new ideas from insurtech and the digital world. And this convergence of the old and the new is the true path to success.

See also: Key Trends in Innovation (Parts 4, 5)  

Our winners have showcased this type of mindset by blending their existing projects and goals with very targeted uses of insurtech, emerging technologies and new data sources.

  • Experiment with new technology and customer experiences. John Hancock’s Vitality Program (2016 winner) engages policyholders through gamification and personalized guidance to increase their healthy activities, like exercise and annual physicals. Policyholders can report data online or through a free wearable fitness tracker. In the next phase of this project, John Hancock has expanded the customer engagement model to now provide discounts on healthy foods from participating stores. Each time the policyholder buys a healthy food, the discount and brand appear on the checkout receipt, reinforcing John Hancock’s role as their partner in healthy living. In addition to the creative application of emerging technologies, John Hancock is shifting from a transactional relationship with their customers to one based on value-added services.
  • Engage with emerging technologies. Texas Mutual (2016 winner) tackled a loss-prevention challenge, engaging workers to learn and follow onsite safety procedures by creating virtual reality scenarios to train construction workers. Texas Mutual’s Safety in a Box app was designed for easily accessible, familiar technology: the user’s mobile phone with a free cardboard viewer. Texas Mutual also distributed viewers at construction industry conferences and filmed in both English and Spanish to reach a broader audience.
  • Incubate innovation. Incubating Haven Life (2015 winner) internally allowed MassMutual to test a new business model: selling life insurance completely online in about 20 minutes. Underwriting Haven Life’s policies relies on external data fed through proprietary algorithms, reducing the time and complexity for the applicant.
  • Look at the big picture – but start small. Motorists (2016 winner) completed the first phase of its plan to achieve complete organizational transformation within 10 years. The ultimate goal is to operate as an “85-year-old startup” designed for innovation and collaboration, and the company redesigned a key workspace to foster this cultural shift. It built around cutting-edge technology to enable work to shift seamlessly across time zones and continents. This first step is intended to encourage more collaborative work styles to spread throughout the company, bringing Motorists closer to its vision.

One of the best parts of our awards program is to showcase how innovation is flourishing within our industry – and not just with greenfield insurers or those partnering with insurtech firms. Together, John Hancock, Texas Mutual, MassMutual and Motorists have more than 400 years of experience in writing insurance. They demonstrate how no company is ever too established to embrace change.

See also: 3 Ways to Leverage Digital Innovation  

For more information on the SMA Innovation in Action Awards and to create your own submission, visit www.strategymeetsaction.com/awardsSubmissions are due by June 30.

We will also be focusing on the power of convergence at our annual SMA Summit in September.

Can You Leapfrog the Competition?

In business, the gap between “knowing what to do” and “doing it” is of increasing concern. Why? Because in a world of rapid change, the gap between leaders and fast followers or laggards will at some point become insurmountable. The forces of change are shifting the status quo. New competitors are rising within and outside the insurance industry.

Last month, Majesco published a research report, Strategic Priorities 2017 — Knowing vs. Doing, that highlighted how insurers are responding to changes in the marketplace. We followed that up with two blogs ­explaining the Knowing — Planning — Doing Gap, and how Habits Stifle Strategy. Today we are focusing on what’s really important…catching up or even leapfrogging! How do we close the gap between where we are and where we need to be to stay competitive?

Recognize the gap. Seize the opportunity.

Insurers are, at their core, risk averse. With today’s pace of change, however, the path of least risk will include taking some risks. The risk to invest in new business models, new products, new markets and new channels can, at minimum, keep insurers competitive. Even better, taking these risks could allow insurers to leapfrog the competition. Because the new competition does not play by the traditional rules of the past, insurers need to be a part of rewriting the rules for the future. There is less risk in a game where you write the rules. Are we acting upon our knowledge of the insurance industry, regulatory requirements and market trends to create a game that plays to our strengths in meeting changing customer and market needs? Or, are we simply educated observers waiting to see if it works, then follow?

See also: A Manufacturing Risk: the Talent Gap  

“Fail fast” is more than a technology, product, service or business model development mantra — it’s a directive to do ANYTHING that will place the organization out on the edge of change. A position of knowledgeable risk — risk with an opportunity for differentiation and growth — is the new normal for insurers. Ask your organization…is it riskier to jump into the gap with uncertainty about the potential of new ideas, or to sit still and accept the certainty of dramatic changes to the insurance industry as we know it?

Bridge the gap in logical phases.

To move from thinking to doing requires a new business paradigm in how we define and think about insurance in the digital age. Most organizations can’t simply flip off one switch (traditional business model and products administered on traditional systems) and flip another on (new business model and products on modern, flexible systems that will handle digital integration and better data acquisition and analysis). The shift is separating the insurance business models of the past 50-plus years that have been based on the business assumptions, products, processes, channels of the Silent and Baby Boomer generations from those of the next generation, the Millennials and Gen Z, as well as many in Gen X.  So, the shift will require steps that provide a bridge across a growing gap of pre- and post-digital age between leaders, fast followers and laggards.

A paradigm shift in phases makes sense, so that business streams overlap each other. For example, we expect to see existing insurers and reinsurers increasingly looking for paths to create the business of the future and revenue growth, by capturing the next generation of customers with new engagement models, products and services. But while doing that, they must fund the future by transforming and optimizing today’s business and the current customers that they have grown over the past decade.

As they rethink their business models and realign them with the customer needs and expectations of those who will be their customers for the next 10 to 20 years, they will logically still be catering to their loyal customers from the past 50-plus years. This will require insurers to know, plan and execute across these three paths:

  1. Keep and grow the existing business, while transforming and building the new business.
  2. Optimize the existing business while building the new business.
  3. Develop a new business model for a new generation of buyers.

These three focal points are critical steps in a world of change and disruption. A new generation of insur­ance buyers with new needs and expectations creates both a challenge and an opportunity. Those who recognize and rapidly respond to this shift will thrive in an increasingly competitive industry to become the new leaders of a re-imagined insurance business.

Act. Right now. Close the gap.

Not every insurance company will be successful in this new world of new customer risks and expectations, ever-advancing technology, data and analytics capabilities and expanding and blurring market boundaries. But if you are determined that your company will succeed, you must act now to start closing the most critical gaps between what your company knows and what it is doing in response to that knowledge.

See also: A Gap That Could Lead to Irrelevance  

Insurance companies must stop talking and start doing. We are entering a new age of insurance underpinned by a seismic shift creating leaps in innovation and disruption, challenging the traditional business assumptions, operations, processes and products of the last 30 to 50 years. The challengers, such as Lemonade, Splice, TROV, Haven Life, Root, Next Insurance and others, are bucking the status quo and introducing new business models, products, processes, channels and experiences for the future. Will they all succeed? Maybe not. But they will alter the landscape, just as others have in the past or in other industries, leaving companies who did not change in their wake. The implications for insurers are enormous. The gap between knowing and doing is putting insurers at significant risk. It is allowing them to fall further behind, making them irrelevant … and potentially extinct.

On the flip side, once your organization jumps the gap, you’ll be in the enviable position of putting distance between your organization and those that didn’t act on their knowledge. Following a road map (similar to the one outlined in the three steps above) will bring your organization to a place where it will be prepared to capture growth and gain the agility to move in new markets.

Closing the gap is a journey that begins with a first step of action. Take that step now!

How Basis for Buying Decisions Is Changing

Building a business around speed and convenience is nothing new. Fast food drive-thrus, cell phones and FedEx overnight delivery services were just some of the predecessors to today’s Ubers, apps and same-day Amazon orders. But in most of these cases, purchase decisions were based upon simple factors — “I’m hungry,” or “We need delivery of a legal document,” or “Of course it would be nice to be able to make a call from my car.”

There were other services for which people understood that immediacy wasn’t an option. Many financial decisions took time. If you wanted to earn a little extra interest by using a certificate of deposit instead of savings, you would have to wait months or years for maturity. Securing life insurance was a multi-week (sometimes multi-month) underwriting process. Applying for a home loan with multiple credit and background checks took time. For the most part, people accepted these elongated processes and delays with resigned and good-natured patience. This was life. Important decisions required time, not only in the preparation, but also in the education and execution. Two hours with a life insurance agent would allow you to learn about all of the products available and understand their complexity, and it would help the agent to fit products to your needs. You valued the time spent learning, understanding and choosing based on the trusted relationship with your agent.

The convergence of generational shifts and technological advancement created a new mindset that rewrote expectations and priorities for many. Patience is no longer always considered a virtue. Insurance relationships are no longer always valued. Time-crunched people seek time-saving services. Value is seen in immediacy, uniqueness and ease.

See also: Innovation: a Need for ‘Patient Urgency’  

Enter the new generation of insurance companies redefining the insurance engagement. Lemonade, TROV, Slice, Haven Life and others who are redefining speed and value to a new generation of buyers … are placing traditional, existing insurers on notice.  From purchasing a policy in less than 10 minutes to paying a claim in less than three seconds … speed and simplicity are the new competitive levers.

Out of necessity, this has changed an insurer’s view of competition. Insurers used to know their competitors. They understood their distinctive value propositions. They debated on what were the real product differentiators. Insurers understood the reach of their agents, their geographic limitations and the customer and agent loyalty they could count on because of their excellent service.

While all of these factors still guide insurance operations, the competitive landscape has shifted to different factors critical to acquiring and retaining customers. Insurers are feebly groping for just a tiny bit of space in consumer minds —enough to plant the seed of need and just a little more to water the plant into engagement and completing a transaction — because today’s consumer isn’t going to listen well enough to grasp distinctive details. He or she is looking for an easy and quick fit.

A 2015 study of Canadian consumers estimated that the average attention span had dropped to 8 seconds from 12 seconds in 2000, driven at least in part by consumers’ constant connections through digital devices.

Need. Purchase. Done. Happy.

A 2012 Pew survey of technology experts predicted what is now coming true, “the impact of networked living on today’s young will drive them to thirst for instant gratification, settle for quick choices and lack patience….trends are leading to a future in which most people are shallow consumers of information.”

Only five years later, insurers are feeling the impact.

A key reason many of the new, innovative companies are appealing to consumers and small and medium-sized businesses (SMBs) is because they simplify and remove some of the cognitive effort required to make decisions about insurance. In his book, Thinking, Fast and Slow, the Nobel Prize-winning behavioral economist Daniel Kahneman described human decision making and thinking as a two-part system. Greatly simplified, System 1 thinking produces quick (i.e. instantaneous and sub-conscious) reflexive, automatic decisions based on instinct and past experiences. These are “gut” reactions. System 2 thinking is slow, deliberate, reason-based and requires cognitive effort.

In general, most of the decisions we make each day are through System 1, which can be both good and bad; good because it increases the speed and efficiency of decision making, and because in most instances the outcomes are acceptable. However, not all outcomes are good, and many could have been improved had System 2 thinking been engaged. The problem with System 2 is that it takes effort, and humans naturally try to minimize effort.

See also: Insurtech: Unstoppable Momentum  

So, a traditionally complex industry is intersecting with a cognitive culture that is mentally trying to simplify, reduce effort and be more intuitive. This has consequences for decisions throughout the customer’s journey with an insurance company. Good decisions about complex issues like insurance should be based on System 2 thinking. However, during the research and buying processes, the cognitive effort to do so can lead many people to choose other paths like seeking shortcuts to in-depth research and analysis or delaying a decision altogether.

In a recent report, Future Trends 2017: The Shift Gains Momentum, Majesco examined how impatience is driving a shift in behavior that is causing insurers to look at the anatomy of decisions. What behaviors are relevant to purchase? To renewals? To service? How can insurers still provide risk protection to individuals who won’t take the time to learn about complex products? We’ve drawn some of these insights out of the report for consideration here.

For one thing, insurers clearly recognize that the trends affecting them are far broader and bigger than the insurance industry. Businesses and startups across all industries are capitalizing on the lucrative opportunity afforded by meeting the ever-increasing demands for speed and simplicity made possible by technology and re-imagined business processes. Amazon Prime, Netflix, Spotify, Uber/Lyft, ApplePay/Samsung Pay, Rocket Mortgage (Quicken Loans), Twitter, Instagram and other technology-based businesses represent contemporary offerings that have simplified the customer journey.

Retailers such as Walmart, Best Buy, Staples, Amazon and even eBay are testing same-day delivery for items ordered online. Simplifying a customer’s entire journey with a company by making it “easy to do business with” is more critical than ever for insurers.

What is the good news in the world of impatience? Insurers are quickly finding ways to counter the disparity between the need for speed and the need for good decisions. They are also using a bit of psychology to positively influence decisions, and they are buying back some brain space with techniques that both inform and engage.

In Part 2 of this series, we will look at these techniques as well as product adaptation, framework preparation and planning for transformation that will meet the demand for quick decisions. For more in-depth information on behavioral insurance impact, download the Future Trends 2017 report today.

How to Transform: From the Outside-In

The insurance industry has not been historically known for innovation. Given that the industry is steeped in risk-avoidance, evolution is fine, while revolution, with rapid change and disruption, creates uncertainty and potentially increased risk. At the heart of this revolution is a shift to the digital age. Unfortunately, many insurers do not fully understand or embrace this shift, creating a gap between insurer capabilities and market expectations.

Insurers sitting on the digital sideline waiting for a clear winning approach that they can copy in a “fast follower” mode are allowing the gap to grow, giving existing competitors within the industry and new competitors from insurtech and outside the industry the ability to expand within the void. The year 2016 saw the revolution in full force with the rapid rise of insurtech that is creating tremendous disruption and innovation in insurance, with digital playing a leading role. From the emergence of startups like Haven Life, on-demand insurers like Slice and TROV and peer-to-peer insurance like Lemonade that have launched as “digital first” companies and solutions, traditional insurers are being increasingly challenged from both business model and market perception perspectives by new entrants.

And while some insurers can point to a few sporadic initiatives and say they’re already in the digital game, our experience is that most have done so in a piecemeal way, without an overarching digital strategy that aligns with and informs the overall business strategy. It requires business leaders to shed sacred notions and wake up to the possibilities of rebuilding on a new foundation while maintaining the old structure long enough to transition smoothly.  Meeting the digital revolution with real transformation demands an acceptance that nearly everything industry insiders have known about insurance no longer applies.

This requires a true “outside-in” view. Cultivating a deep understanding of customers’ needs and desires should be the first step any insurer takes as it begins or accelerates its own digital transformation.

See also: Insurtech: One More Sign of Renaissance

Defining Digital

What do we mean when we say “digital”? Defining this – or at least coming to some common understanding – is essential to wise decision making when it comes to digital investments. Wander the streets of any insurance enclave and ask every insurance company employee you run into what “digital” means in the insurance context, and you are going to get a lot of different answers, more than a few of them self-contradictory.

Definitions can range from narrow to broad, although, in our experience, most insurance company personnel stick with a narrow, capabilities-focused view of what digital is:  “Digital means a portal” or, slightly more broadly, “Digital means a tool or tools for enhanced customer communication.” From our perspective, these are too restrictive – because digital is not just about the technology. It’s about the people, processes and technologies that allow insurers to understand and interact with stakeholders – insureds, agents, brokers, partners, internal staff, etc. – in compelling, consistent and personalized ways.

Transforming From the Outside-In

So how do you create those compelling, consistent and personalized experiences for customers? The first step is widening the aperture on who a “customer” is. It is not just insureds, nor even agents nor brokers, which have been the focus of portal solutions. This narrow view leaves out a range of other stakeholders across the value chain that interact with the insurer and each other and are ripe for digitalization.

Digital initiatives of some kind are almost universal in the insurance industry. It is rare for a company in any industry to not have at least a simple Web page. But what insurers do not consistently consider is defining what they mean by “digital,” what they want to achieve and how all the pieces fit together holistically to get a solid return on digital investments.

Many insurers take a very tactical approach to digital strategy and investments, focusing on discrete capabilities rather than taking a business-need-driven approach. To make matters worse, the capabilities are too often based on internal stakeholders’ views rather than the external “customer” – the classic “inside-out” approach (aka, “build it and they will come”). The more effective approach is to deeply understand your customers by mapping their interaction journey across the value chain. This is the “outside-in” approach that will shape the digital strategy and priorities.

Creating a digital strategy includes key building blocks. Insurers must outline their objectives and map customer journeys as steps in a calculated progression of the insurer toward a continuum of integrated digital initiatives. But no matter what the strategy and priorities are, they need to be based on the customers themselves. Whether through surveys, interviews, workshops or some combination, it is essential to step outside of your company walls and view the process from the perspective of the customer.

It is also important to look outside of the insurance industry for guidance. Majesco’s own research studies with consumers and small and medium businesses revealed that insurance is in last place compared with other industries when it comes to ease of researching, buying and servicing products and services – even below the cable industry! The studies show that ease of use is very tightly connected to Net Promoter Scores (NPS), and we know from industry research that NPS scores are a key indicator of growth, profitability and customer loyalty. Insurance is clearly different in many ways from those other industries, but lessons and inspiration can and should be gained from their success.

Why Is it Different This Time?

You may think we;re just going through another fad. But there are key reasons why digital transformation is different than previous business modernization initiatives, such as e-business.

From our perspective, it comes down to two overarching reasons. First, customers are the drivers. Whether those customers are individual policyholders, small business owners, large business employees, insurance employees or distribution partners, they are people who use digital technologies every day. Their digital demands are driving this shift, often based on their digital experiences with other businesses and industries. This is often referred to as the “Amazon effect.”

And second, the digital revolution is led from outside of insurance. Relevant stakeholders experience high-end customer engagement from non-insurers on a regular basis To paraphrase Paul Papas, head of IBM’s Interactive Experience, the last best digital customer experience someone has anywhere is what they now expect everywhere, even from their insurance companies.

Where to Start

Given the range of things to consider, it can be difficult to know where to begin. Many insurers have started with sales, marketing and distribution. These are natural starting points. A host of insurtech startups have also focused on these areas, offering tremendous innovations and best practices from which insurers may derive their own transformational lessons.

But there are several other areas of the value chain that can capture needed efficiencies, value and improvement through digital transformation. Enrollment, claims, product development, policy issue and service are all great starting points for a digital transformation and can have a profound impact on customer satisfaction and efficiency.

In coming blog posts, I will explore each step in the value chain and the potential impact on each from digital transformation.

See also: 5 Cs of Transformation in Insurance  

Final Thoughts

If you’re reading this, you’ve probably already begun your digital journey, or are at least thinking about doing so. I hope so! The gap between what customers expect and what insurers are able to provide is growing daily and rapidly into a chasm that will be increasingly difficult for many insurers to traverse. And it is only going to get tougher. The pace of change is accelerating, and the gap is widening and becoming harder to bridge. Those who don’t make moves to bridge or at least slow the widening of the gap are going to be left behind.

It is a time of great change in insurance. A rebirth – a renaissance – of the industry is happening with the customer at the forefront. While it can be frightening, it is also exciting. It is time to embrace the shift and begin your digital transformation!

For a deeper look at this topic, please see our recently published white paper, Insurance in the Digital Age: Transforming from the Outside In.

5 Topics to Add to Your List for 2017

As an industry, we are knowledgeable. In fact, I think one could say that insurers may know more about the way the world works than most other industries. We hold the keys to risk management and the answers to statistical probability. We underpin people, businesses and economies world-wide. We have centuries of real-world experience and decades of real-world data dealing with individuals, groups, businesses, property, life, investments and health.

Yet, in 2017, none of that experience will matter unless we are willing to embrace an entirely new field of knowledge. The convergence of technology with digital, mobile, social, new data sources like the Internet of Things (IoT) and new lifestyle trends will make insurers better, smarter and more successful IF we are willing to “go back to school” and audit the class on modern, innovative insurance models, generational shifts in needs and expectations and disruptive technologies.

This class is largely self-taught. Between you, Google, traditional and new media (think Coverager, Insurance Thought Leadership and InsurTech News), social networks and a few hours each week, you can expand your horizon toward the future to become a knowledgeable participant in 21st century insurance. It will help, however, if you know what to search for. In this blog, I’m going to give you five high-level areas to keep tabs on in the coming months. These are the places where technology and market shifts are going to create massive competitive energy in the coming year.

Insurtech, Greenfields and Startups

As of this writing, AngelList (a startup serving startups,) lists 1,069 insurance-related startups. Many of these are new solution technology companies. Others are new insurance companies or MGAs focusing on new market segments, new products and new business models. The influx of capital from venture capital firms, reinsurers and insurers has advanced the proliferation of startups and greenfields based on new tech capabilities. Business model disruption will continue to be mind-boggling, exciting and scary all at the same time — bringing insurtech into the mainstream and powering the industry-wide wave of innovation.

Whether you are sifting through ideas to improve your competitive position, launch a new insurance startup or greenfield, seek partners actively engaged in insurtech or invest or acquire a new technology startup, insurtech companies and their growing numbers are to be watched. Reading through these types of lists will give you a feel for the expansive nature of insurance. You’ll see how marketing minds are turning traditional insurance concepts into relevant products and solutions that fit today’s and tomorrow’s lifestyles. Be inspired to engage in insurtech in 2017, because time is of the essence. For background, start by reading Seed Planting in the Greenfields of Insurance.

See also: 10 Predictions for Insurtech in 2017  

Artificial Intelligence and Cognitive Computing

AI and cognitive computing technologies like IBM’s Watson have been touted as the link between data and human-like analysis. Because insurance requires so much human interaction and analysis regarding everything from underwriting through claims, cognitive computing may be insurance’s next solution to better analyze, price and understand risks using new data sources and add an engaging and personalized advisory interface to their services to achieve efficiency and improvements in effectiveness as well as competitive differentiation. Cognitive computing’s speed makes it a great candidate for underwriting, claims and customer service applications and any task requiring near-instant answers. IBM and Majesco recently announced a partnership to match insurance-specific functionality with cloud and cognitive capabilities. This will be an area to watch throughout 2017.

On-Demand, Peer-to-Peer and Connected Insurance

Trov allows individuals to insure the things they own, only for the periods during which they need to insure them. Cuvva is betting that people will want to have insurance on their friend’s cars during the time in which they borrow them. Slice launched on-demand home-share insurance to hosts using homeshare platforms like Airbnb, HomeAway, OneFineStay and FlipKey. Verifly offers on-demand drone insurance. Insurance startups are filled with companies that are providing insurance to the new spaces, places, behaviors and lifestyles where insurance is needed.

Other startups are using social networks and the Internet of Things to bring parity to insurance, often lowering premiums. Peer-to-peer insurers like Friendsurance and Lemonade put customers into groups where the group’s members pool their premiums, payment for claims come from the pool and, in the case of Lemonade, leftover premium is contributed to social causes. Metromile uses real usage data to provide fair auto insurance premiums.

Here is a space where insurers must keep their eyes open for opportunities. How can P&C insurers cover those who don’t own a car, but who still drive periodically? How will group health insurers help employers lower their rate of medical claims? How will life insurers promote wellness and reduce premiums?  Many of the answers will be found in digital connections, social knowledge, IoT data and an ability to provide timely, instant and on-demand coverage.  For more insight, start reading 2016’s Future Trends: A Seismic Shift Underway and the soon-to-be-released update.

The Revival of Life Insurance

One area that will receive a much-needed insurtech stimulus will be life insurance. The life insurance industry ranks last as noted in the recent research, The Rise of the New Insurance Customer: Shifting Views and Expectations; Is Your Business Ready for Them?, which is likely reflected in the decline of life insurance purchases over the past 50 years. The 2010 LIMRA Trends in Life Insurance Ownership report notes that U.S. individual life insurance ownership had dropped to the lowest rate in 50 years, with the ownership rate at just 44%. As new simplified products are introduced, new data streams proliferate and real-time connections improve, life products are poised to change. Already, new life insurers and traditional life insurers are positioning to use connected health data as a factor in setting premiums. John Hancock’s Vitality is perhaps the best current example, but other players are entering the mix — many simply claiming to have a better methodology for selling and servicing life policies. Haven Life, owned by Mass Mutual, and companies such as Ladder, in California, are reinventing term insurance … from simplifying the product to creating an “Amazon-like” experience in buying in rapid time. Ladder, in particular, uses a MadLibs-type underwriting form that’s not only relevant but fun to use.

The life insurance industry is hampered by decades-old legacy systems and the cost of conversion and transformation is taking too long and costing too much. As a result, look for existing insurers to begin to launch new brands or new businesses with modern, cloud core platforms to rapidly innovate and bring new products to market for a new generation of customers, millennials and Gen Z. As we saw in 2016, most new entrants are aimed at term products that will sell easily and quickly to the underserved Gen Z and millennial markets. New life players and products, as well as existing life insurers, reinsurers and even P&C insurers seeking to capture this opportunity will be interesting to watch in 2017.

See also: What’s Next for Life Insurance Industry?  

Cloud and Pay-As-You-Use

If your company is underusing or not using cloud computing with pay-as-you-use models, 2017 should be a year for assessment. Though cloud use isn’t new, its business case is picking up steam. Search “cloud computing and insurance” and you’ll find that the reasons companies are seeking cloud solutions are evolving.

The case for core system platform in the cloud reached the tipping point in 2016 … from nice to consider to a must have, and it will be the option of choice in 2017. The logic has grown as capabilities have improved, cost pressures have increased and now the demand for speed to value and effective use of capital on the business rather than infrastructure is gaining priority. Incubating and market testing new products in a fail-fast approach allows insurers to see quick success and capitalize on pre-built functionality with none of the multi-year implementation timeframes.

Increasingly, many insurers are taking advantage of the same pay-as-you-use principles of cloud as consumers themselves. They are paying as they grow, with agreements that allow them to pay-per-policy or pay based on premiums. They are using data-on-demand relationships for everything from medical evidence to geographic data and credit scoring. They use technology partners and consultants in an effort to not waste downtime, capital, resources and budgets. They are rapidly moving to a pay-as-they-use world, building pay-as-they-need insurance enterprises. This is especially true for greenfields and startups, where a large part of the economic equation is an elegant, pay-as-you-grow technology framework. They can turn that framework into a safe testing ground for innovative concepts without the fear of tremendous loss, while having the ability grow if the concepts are wildly successful. Major insurance research firms advocate cloud as a smart approach to modernizing infrastructure and building new business models. Keeping cloud on your company’s radar is crucial and good place to start is reading The Insurance Renaissance: InsureTech’s Pay-As-You-Go Promise.

These are just a few of the areas we should all be watching throughout 2017, but the vital step is to take your new knowledge and apply your “actionable insights” throughout your organization, powering a renaissance of insurance.

Make 2017 your company’s Year of Insurance Renaissance and Transformation!