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What’s newsworthy in life insurance

Top 3 trends to watch in 2022

Life is short. And, unfortunately for some thanks to COVID-19, it’s getting even shorter. According to the Centers for Disease Control and Prevention (CDC), the pandemic has contributed to a 1.5-year decrease in life expectancy in the United States.1

This grim reality has many people living life to the fullest

For some that means following their dreams by going back to school. For others, it’s about (safely) traveling to new places. And still others interpret it as thinking ahead. More specifically, helping to protect their loved ones’ futures by buying life insurance.

Here are three top life insurance trends to expect this year:

1. Growth

COVID-19 has raised consumers’ awareness about the importance of having life insurance coverage. A LIMRA survey found that about 31% of consumers said they are more likely to buy life insurance because of the pandemic, with an actual 21% increase in total U.S. life insurance premium in the second quarter 2021.2

Last year, life insurance application activity grew more than twice as fast for Americans 44 and younger compared to those 45-59, according to MIB Group, an information-sharing service for insurers.3

And LIMRA’s survey found that 45% of millennials are more likely to buy life insurance because of COVID-19.2

2. A shared value approach

Actuarial Science uses math and stats to assess risk and inform premiums. But what if those premiums were based on actual policyholder data?

Through capturing and analyzing real-time data, technology is making it possible for insurance companies to help consumers become healthier and achieve longer life expectancy. (Think counting steps to help you get fit.) And by engaging with the policyholder, policy lapses are reduced by 30%.4 This approach is called shared value.

Some Japanese life insurance companies have even moved to a ‘pay as you live’ premium schedule with dynamic pricing. So, in theory, customers with healthy behaviors pay lower premiums.5

Additionally, data-driven claims management can significantly improve payout accuracy, overall efficiency and customer experience. 6

Which brings us to the third trend…

3. The customer experience

Insurance companies that are prioritizing the customer experience are also prioritizing their own success, as many in the industry are slow to change.7 In fact, according to a recent McKinsey report, a superior customer experience drives profitable growth — more than additional advertising or lower pricing. 8

A simpler claims process, automated tools, and going mobile with the application process are just a few things insurance companies can do to improve the customer relationship and experience.

So while life is short(er), the right life insurance policy makes it easier to live well.

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Learn more

1. Centers for Disease Control and Prevention. July 21, 2021, press release.

2. LIMRA: First Half of 2021 Had Highest U.S. Life Insurance Policy Sales Growth Since 1983. September 1, 2021, press release.

3. Rose, Georgia. “The freelancing boom may change how you buy life insurance.” Daily Herald, September 19, 2021.

4. Cummings, Robert. “How Shared Value Insurance is Transforming People’s Lives and The Industry.” Forbes, September 8, 2021.

5. Bernard, Pierre-Ignace, Ellingrud, Kweilin, Godsall, Jonathan, Kotanko, Bernard, Reich, Andrew. “Reimagining the industry for the decade ahead.” McKinsey & Company, September 29, 2020.

6. “Harnessing the power of digital in life insurance.” McKinsey & Company.

7. Shukla, Ush. “How a Strong Digital Backbone is Transforming Life Insurance.” Solace, October 22, 2020.

8. “The Growth Engine: Superior Customer Experience in Insurance.” McKinsey & Company.

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