Life Insurance Top Trends 2021

1© Capgemini 2020. All rights reserved |
Life Insurance:
Top Trends 2021
December 2020
Link: https://www.capgemini.com/top-trends-in-2021/

2© Capgemini 2020. All rights reserved |Life Insurance Trends 2021 – December 2020
Top Trends in Life Insurance for 2021 by Capgemini
COVID-19 has increased customer demand for life insurance by ~10 percentage points compared to pre-COVID levels.
Life insurers find
themselves
grappling with…
Sources: 1 World Health Organization, “Ageing and Health,” Feb 5, 2018; 2 ManpowerGroup, “MILLENNIAL CAREERS: 2020 VISION,” accessed Oct 2020; 3 Capgemini | Efma, World Insurance Report 2020; 4 Ibid;
5 Capgemini | Efma, World Insurance Report 2019; 6 Capgemini | Efma, World InsurTech Report 2020; 7 Swiss Re, “Sigma/No 4 2020,” Jul 2020; Capgemini Financial Services Analysis, 2020.

Source: Capgemini Financial Services Analysis, 2020.

Trend 1: Customer engagement takes center stage
Life insurers are bridging customer disconnects through initiatives such as health and wellness programs
to improve policyholder stickiness.
Enhanced customer engagement sparks positive impact
Reduces
policy lapses
Increases
cross-sell and
up-sell opportunities
Policyholders adopt healthy
lifestyle habits
Better customer
segmentation

Trend 2: Omnichannel sales and novel ways to interact with customers
Omnichannel gives customers the flexibility to seamlessly switch between modes of interaction,
and innovative digital solutions help insurers enhance communication methods.
Benefits from omnichannel sales and innovative digital solutions
Seamless customer
experience across
multiple channels
Engaging with customers
through the right channel at
the right time
Digital tools enabling
sales agents to process
application faster
Innovative digital solutions
to improve customer
communications

Trend 3: Providing customers with self-service options
Self-service allows customers to skip traditional agent and broker channels as
per need and convenience.
The percentage of digital channel customer interactions is on the rise, 2020
17
16
18
22
17
22
14
15
14
21
27
20
26
17
21
18
25
30
23
27
20
Before COVID-19 Current preference In the next 6-9 months
Branch Agents
and Brokers
Mobile app Company
website
Call centers
(phone)
Social media Chatbots

Trend 4: Simple, innovative, and differentiated products for better customer experience
Changing demographics and evolving customer preferences are driving life insurers to revisit
their portfolios and create innovative products that stand out.
What do policyholders want from their life insurance policy?
Simple to
understand
Transparent
coverage details
Clear eligibility
criteria
Customized
offerings
Purchase through
digital channels
Hybrid
features or
bundled offerings

Trend 5: Life insurers are adopting intelligent automation
Intelligent automation can be a critical success factor in achieving cost efficiency and timely operational processes.
How can life insurers get the most from intelligent automation?
Intelligent
automation
Image analytics
Underwriting and claims
Chatbots and virtual agents
Customer insights
Data extraction

Trend 6: Life insurers increasingly leverage alternate data sources for underwriting decisions
The pandemic is spurring life insurers to switch to alternate data-driven underwriting techniques, use AI models, and
shift to virtual medical exams.
Benefits of using alternate data for underwriting
Better
customer
insight
Reduced
underwriting time
Enhanced
customer
experience
Comprehensive
risk assessment
Diminished customer
acquisition cost

Trend 7: Life insurers are detecting and preventing fraud through new methods
Life insurers are now turning to advanced data analytics, artificial intelligence, and predictive modeling for effective
fraud detection and timely prevention.
Fraud detection using AI and advanced data analytics
Design application process
leveraging red flags repository
Built red flags repository
for fraud detection
Combine claims data from
other LOBs for red flags
Advanced analytics to
validate claims data
Detect anomalies in
applicant behavior
Define underwriting rules
to predict fraud

Trend 8: Life insurers are transitioning out of legacy platforms
Life insurers are adopting modern platforms or migrating existing legacy modules to the
cloud to modernize core systems.
Why are life insurers modernizing their core systems?
Enable STP and
reduce business
process complexity
Free-up funds to
focus on sales,
service and
business initiatives
Reduce future
integration cost
Rationalize number
of systems to be
managed

Trend 9: Collaborating with ecosystem players speeds up the game
Life insurers are closely collaborating with ecosystem players to acquire critical capabilities for business continuity,
accelerate their digitization efforts, and differentiate their offerings.
Drivers for collaboration with ecosystem players
Technology
Distribution
Differentiation
CX

Awareness of high-impact business trends can enable life insurers to become
frontrunners of the future
 Adoption priority refers to the urgency of adopting a particular trend to create maximize value in
2021. Ratings are based on identified trends for insurers operating in the current environment.
 Business impact represents the influence of an identified trend on a firm’s 2021 business, including
impact on customer experience, operational excellence, regulatory compliance, or profitability.
1 Customer engagement takes center stage
2 Omnichannel sales and novel ways to interact with customers
3 Providing customers with self-service options
4
Simple, innovative, and differentiated products for better customer
experience
5 Life insurers are adopting intelligent automation
6
Life insurers increasingly leverage alternate data sources for
underwriting decisions
7 Life insurers are detecting and preventing fraud through new methods
8 Life insurers are transitioning out of legacy platforms
9 Collaborating with ecosystem players speeds up the game
Adoptionpriority(2021)
MediumHighSignificant
Business impact (2021)
Medium High Significant
3
1
8
7
5 9
6
4 2
 This matrix represents the view of Capgemini analysts for an insurer working within the current operating environment.
• Low interest rate environment
• Operational disruption due to COVID-19
• Uncertain regulatory environment
• Highly-competitive environment and increased focus
on customer centricity due to new-age players
• Emerging consumer preferences.
The factors above will vary by insurer depending on business priorities, geographic location, and several other factors. For specific requirements, contact insurance@capgemini.com.

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Life Insurance Top Trends 2021

Life Insurance Top Trends 2021

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