Insurtech Shaking Up The Life Insurance Industry
BALTIMORE -- Although the insurance industry is known for moving slowly when it comes to change, the insurtech revolution is forcing executives out of their comfort zones.
Technology is changing the industry from the initial life insurance application to how clients are services many years down the road. And virtually everything in between. While so much change so quickly might make some uncomfortable, the end result will transform the industry and be a good thing, said Michael Kalen, CEO of Covr Financial Technologies.
Kalen is part of a panel today at the LIMRA Life Insurance Conference. The panel will debate the impact of insurtech to date and ponder how it might changes processes in the future. As many as 20 companies have made substantial insurtech investments that are changing the industry, Kalen said.
Two areas, in particular, have really progressed significantly down the insurtech path, he added.
First and foremost, insurers have put up serious money to back investment projects, as well as teams devoted to finding new opportunities.
"Allianz Life Ventures has a dedicated team and they’ve probably invested in a dozen companies," Kalen said. "It’s really hard to raise smart money and if you're lucky enough to get a partner like Allianz, you have a partner that gives you reach to distribution and access.
Routine Matters
When it comes to the routine matters of selling life insurance day-to-day, insurtech is making processes faster, more reliable and easier for the consumer. That can make those smaller policies worth it, Kalen said, as long as companies are comfortable with agents doing things like phone interviews and taking online applications.
"I think there’s 18 or 19 companies now who will issue insurance instantly," he said. "Agents don’t have the time or resources to go and visit clients for all these small policies. But they can still get commissions and they’re viewed more positively by their clients."
There are insurtech possibilities the industry could do better, Kalen insisted. Like embracing electronic signatures, and moving forward on electronic health records, which he called "the next great frontier."
Otherwise, insurtech will only help life insurance become a greater part of financial planning, Kalen said. Life insurance is often left out of those discussions, but insurtech software solutions are calculating life insurance as part of overall financial plans. That will help as holistic planning grows, Kalen explained.
"It’s quite interesting how these companies are taking capital and redeploying it within the industry … to help make sure that we’re relevant and driving change," he said. "Who knows our business better than we do?"
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.