Catching up with the consumer in 2024

While technology is driving many industries to new levels of innovation and profit, insurers continue to discuss such advancements in the future tense. Recognizing that consumers want instant service and results, many are striving to provide the immediately responsive (mainly online) experience that most consumers have come to expect. 

Artificial intelligence. Big data. Blockchain. These and other technological advances have made many insurers claim they would bring the industry in line with what consumers have come to expect in speed and convenience.  

Although this movement is underway, it seems decidedly slower than in other segments of the marketplace. 

Let’s hope 2024 is the year the insurance industry catches up to the consumer. Here are some key areas (there are many — these are just a few) where we hope to see progress.

Digital transformation: As 2023 ends, the phrase “digital transformation” has an almost outdated ring to it. This is something that was all the rage a decade ago. But as we see more companies invest in online sales platforms, customer service automation and data analytics to better understand and serve their customers, let’s hope this is something that can occur on a meaningful scale in 2024.

Personalized products: Insurers may increasingly use big data and AI to offer more personalized annuities and life insurance products. This could mean more customized coverage options and pricing based on individual risk profiles and needs.

Blockchain and smart contracts: The use of blockchain technology for policy issuance, claims processing and smart contracts could streamline the insurance process, reducing administrative overhead and the risk of fraud. Blockchain was another tech area that was hyped a few years ago, without a lot of concrete results for the industry.

Longevity and health data: As advancements in health care continue, insurers may place more emphasis on collecting and analyzing health and longevity data. This could lead to more precise underwriting and pricing for life insurance policies and annuities. John Hancock has led the life insurance market as longevity champion and facilitator for its customers, with MassMutual recently following suit. We may see more companies intertwine health and longevity with their product offerings.

Innovative distribution channels: New distribution channels, including insurtech platforms and partnerships with nontraditional players such as tech companies, are likely to continue to emerge and change how insurance products are sold and serviced.

Cybersecurity: With an increasing reliance on digital technologies, insurance companies must enhance their cybersecurity measures to protect sensitive customer data and financial information.

In addition to technological changes, other areas could see great change in 2024. 

Hybrid products: As we’ve seen increased availability of hybrid products, such as life insurance/long-term care combinations, insurers might introduce more hybrid products that combine elements of life insurance, annuities and investments. These could offer flexible benefits and potentially higher returns as well as meet the more specific individual needs of consumers.

Regulatory changes: Regulatory shifts at the national and international levels can significantly impact the insurance industry. Changes in tax laws, consumer protection regulations and interest rate policies can affect the attractiveness of annuities and life insurance as investments.

Rising interest rates: Changes in interest rates and a rocky stock market have influenced the attractiveness of annuities as higher rates result not only in better payouts for policyholders but also provide more confidence in their financial futures. Insurers will need to adapt to changing interest rate environments.

Evolving demographics: The U.S. is already in the midst of the baby boom retirement wave. The aging population will certainly continue to impact the demand for annuities and life insurance. Insurers will need to adjust their product offerings and marketing strategies accordingly.

Eco-friendly and sustainable options: With growing environmental awareness, some insurers may introduce green or sustainable insurance products. These products could possibly relate to life insurance that supports eco-friendly initiatives or annuities that invest in sustainable funds. 

Pandemic-related impacts: As we’ve seen with the questions about continuing “excess mortality,” the ongoing effects of the COVID-19 pandemic may lead to changes in how insurers underwrite policies, with more focus on pandemics and health-related risks.

There are likely many more areas in which we may see change in 2024. We’ll continue to track progress as the industry continues to modernize and innovate. We hope the coming year will bring positive change on many of these fronts, bringing insurance into line with consumer expectations. 

John Forcucci
Editor-in-chief

John Forcucci is InsuranceNewsNet editor-in-chief. He has had a long career in daily and weekly journalism. Contact him at johnf@innemail.