As someone who covers the insurance industry on both the property/casualty and life/health side, I’m constantly inundated with news about how companies are trying to transform a traditionally conservative, sometimes technically stalled industry.
“Fintech” and “insurtech” are two terms that are continuously thrown in our face; you on the life sales side, trying to keep up with new advancements and me on the news coverage side trying to keep up with announcements about such innovations. And I’ll have to admit, I’ve become a bit jaded by the two terms. I realize it’s still an important topic to keep an eye on – and I do – however, with the exception of startups like Hippo and Trov, I’ve yet to see a true disruption of the life insurance industry.
Maybe that’s about to change, with the birth of “lifetech,” a term that has yet to become the industry’s most overused word of the decade and one that may spawn true disruption in the life insurance industry.
Distinctly different from insurtech and fintech, lifetech refers to startups that deliver new technologies to aid life insurance companies in an ever-changing technical world. And it has caught the eye of at least one big insurer: New York Life. The company’s venture capital arm, New York Life Ventures, has screened more than 1,700 startups, many of them focused on lifetech.
According to Joel Albarella, head of New York Life Ventures, “The emerging lifetech ecosystem includes aspects of insurtech and fintech, but is truly its own universe. Beyond those two established categories, we see a substantial group of start-ups that deliver value propositions more appropriately identified as lifetech due to their significant relevancy to the life insurance industry. In fact, only about 20% of the startups we track overlap with the insurtech world.”
Why am I telling you this? Because now is the time to realize the enormous opportunities there are when it comes to connecting with those outside of the traditional scope of the life insurance industry. For established life insurance companies, it may mean teaming up with a digital healthtech startup or data analytics firm flush with scientists. For agents and advisors, it may mean embracing the change set forth by the underwriters.
As Albarella noted, “the growing intersection of technology and life insurance that we’re seeing in LifeTech will surely have profound implications for life insurance consumers, agents and employees alike.”
Whether it’s fintech, insurtech or lifetech, the underlying purpose is the same: creating more digitization to attract future generations as customers
In fact, a recent study by Unquork, a fulfillment platform for financial services and insurance companies, found that insurers view digitization as the key innovation that will drive their business going forward. According to the survey summary, insurers are steadily recognizing the different areas where digital transformation could enhance their business. More than two-thirds (67%) see the greatest opportunity for digital transformation in client onboarding, leading the pack ahead of product development (36%), claims (32%) and risk management (22%). Also, eight in 10 insurers are confident that digitization of the business and the elimination of paper in the onboarding process will help their company, at a time when 43% of respondents say that at least half of applications contain errors or are missing information.
Life insurance ownership is currently at a 50-year low. Considering that statistic, I’d say it wouldn’t hurt to try anything and everything to get the product into the hands of consumers, and lifetech may help agents and advisors do just that. Though not a panacea by any means, digitization in its own right will continue to advance an industry in need of a push forward, and that’s from one life insurance proponent to another.
Emily Holbrook is the Content Manager of the Women’s Insurance Network (www.windigest.com) and is a former Editor in Chief of National Underwriter Life & Health and Retirement Advisor magazines. She owns her own writing, editing and content strategy company, Red Label Writing, LLC. She can be reached at email@example.com.