“For an industry that has been set on the foundations of data analysis, the life insurance industry is still very much in its infancy on the use of data and analytics to improve the way we engage with customers…”

ASIC’s (The Australian Securities and Investments Commission) Deputy Chair, Peter Kell, has called it the festival of insurance.

The life insurance industry in Australia is facing a level of scrutiny that it has never experienced before from across the political, regulatory, media, industry bodies and customer advocate groups spectrums. Instances of poor customer experiences are the predominant driver of this attention. 

For an industry that has been set on the foundations of data analysis, the life insurance industry is still very much in its infancy on the use of data and analytics to improve the way we engage with customers.

Advancements in digitisation and data science coupled with intense scrutiny are creating a market that is ripe for disruption, where customers will begin to have a richer and more rewarding experience.

The bar and expectation for this is high and will be benchmarked by memorable experiences customers have had, not just within our sector, but more likely driven by those outside of the industry.

Through digital and data, customer expectations are constantly evolving. They expect immediacy and information in real time. For example, their expectation to be notified on the status of their insurance application or claim is being defined by their experiences in other industries.  Real time SMS or email alerts from DHL couriers, digital visualisation of a pizza delivery from Dominos and real time mobile visualisations of an approaching Uber have redefined what an experience can look like.

Life insurers will begin to witness more and more life companies in Australia adopting customer journey mapping and human-centric design to build a transformative customer experience. This will span the entire spectrum of the customer journey process, starting from driving awareness right through to exit.

An increase in the critical and effective use of data will result in a number of benefits. Data will enable the deployment of newer propensity models, bring down the cost of acquisition and assist in the proactive engagement with customers. Added to this, partnerships with strategic third party data houses will enable life insurers to further augment the information they have.

As capabilities improve and technologies develop, the industry may see more instances of robo-advice and simplified application and underwriting processes. Insurers will be able to leverage customer information they already have – both in the traditional sense and through information sourced via emerging technologies such as wearable devices, which arguably is still in its nascent state but does have potential.

Life insurers will see customised products and digital communications becoming the norm. This means solutions and information must become simpler to understand and engage with.

To deliver a truly integrated omni-channel experience for customers, life insurance employees and distribution partners, insurers will need to invest in digital and data technologies that enable a single customer view. This will provide experiences akin to purchasing, viewing and optimising your iTunes content.

The delivery of digital and data capabilities will further increase engagement levels between life insurers and customers, which may enable life insurers to help customers lead healthier and better lives.

In addition to having a substantial impact on the customer experience, digital and data has a significant role to play in transforming the operating model within life insurers.

From having a digital-first mindset in whatever a life insurer is doing, to in-time repurposing roles due to advancements in machine learning and artificial intelligence (AI), digital and data will have a substantial impact on the life insurance industry now and in the future.