It’s often said that the case for change looks clearest in hindsight.
As we look back on a turbulent 2021, I say it’s more than that. True change requires us to also look at the future – and through a different lens.
Even after a decades-long career in insurance, nothing could fully prepare me for my first year at a life reinsurer during a lengthy global health crisis. As the pandemic nears the two-year mark, it’s clear that COVID-19 will leave behind a different world. There are four lessons I’ve learned that may help all of us better navigate the pandemic’s long (and hopefully impending) goodbye so we can say hello to a new and brighter future:
I’ve partnered with reinsurers throughout my career, but I didn’t fully appreciate the value reinsurers place on partnership until I came to RGA. As I see it, the real power of partnership means that by pooling resources, two can achieve a shared objective that neither party could accomplish alone. Partnership demands extraordinary focus, constant communication, and hard work. We’ve seen a lot of that over the course of the pandemic.
Partnership demands extraordinary focus, constant communication, and hard work. We’ve seen a lot of that over the course of the pandemic.
We’ve also seen a lot of changes over the past 22 months, and many seem likely to last well beyond the pandemic. Companies are feeling more pressure than ever to invest in the customer experience, to modernize and accelerate underwriting, to navigate accounting and regulatory changes – and in some cases, to experiment with distribution and engagement models. Our industry attracts a wide array of opinions about technologies and tools that address these needs, but what is real, and what is a distraction? What will move us forward and what will simply hold us back?
These are not straightforward questions. Insurers are discovering what it will take to materially alter the customer experience – from sales through post-issue. It takes investment, vision, and commitment from a partner with the resources and incentive to see any transformation through to the end. A startup, for example, might offer technology, but not necessarily a business model built fully around supporting the carrier. The right reinsurer has the incentive and ability to stand behind the insurer over the long-term.
In this rapidly evolving landscape, insurers could benefit from sharing ideas, experiences, and insights with one another. However, we operate in a competitive industry, and there’s only so much sharing that can be done among competitors. In my 30+ years on the direct side, I had a sense of what other carriers were working on, but they couldn’t tell me nor could I share with them.
Reinsurers are in a far different position: We serve the entire industry. When a new challenge arises or opportunity emerges, I can pick up the phone and call other leaders. Consider the final expense market: I hadn’t given much credence to this product line in the past, but only because I had been viewing it through the lens of one company’s strategy and circumstances. Now at a reinsurer, I’m able to see the opportunity from a broader perspective and learn about exciting alternative models and new ways of thinking about this significant market. Reinsurers can serve as a kind of connective tissue that keeps an exchange of insights flowing to fuel more productive innovation.
Reinsurers can serve as a kind of connective tissue that keeps an exchange of insights flowing to fuel more productive innovation.
Life insurers have long strived to capture customers’ attention, and now in the wake of a major worldwide health crisis, we have their attention. It’s incumbent upon us as an industry to demonstrate our value and deliver on our promise. According to the 2021 LIMRA and Life Happens Insurance Barometer Study, more than 35% of consumers surveyed plan to purchase life insurance within the next 12 months, the highest numbers in the survey’s history.
Seizing this opportunity is a central challenge. Economic and health shocks have left many insurers struggling to meet sudden demand for protection products. Reinsurers can help ease the capacity and process bottlenecks and enable insurers to take on more new business. At RGA, we have worked hard throughout the pandemic to assemble and make available the necessary expertise to support, supplement, and stand-in for our insurer partners in areas such as underwriting and claims, so that they can protect more people. In fact, our claims team has kept pace with increased volume from COVID-19, and our underwriters reviewed more facultative cases in 2021 than any other year in RGA history.
Economic and health shocks have left many insurers struggling to meet sudden demand for protection products. Reinsurers can help ease capacity and process bottlenecks.
Although interest in insurance products has never been higher, many consumers remain reluctant to step into the purchasing process. According to LIMRA/LOMA, nearly half (47%) of potential customers have delayed making an insurance purchase, and over a third (36%) believe they simply would not qualify for coverage. Life insurance, it seems, is still viewed as intimidating. Working together, we can make it less so.
Many in the industry seem fixated on our failings, on opportunities missed, and investments needed. While there is a lot of work ahead, I’ve learned to appreciate how far we’ve come and how much we have to celebrate.
We have learned to operate remotely and make it work successfully; we have collapsed almost a decade of technology investment and innovation into less than two years and rapidly accelerated underwriting; and we’ve achieved significant productivity gains at the same time.
From a longer-term perspective, we are researching, partnering, and testing technologies we would likely not have considered a few years ago. More than ever, we rely on data. Alternative data sources and digital health records are becoming a standard in underwriting. That’s a major step forward we can celebrate. We need to continue making this transition responsibly, in a way that protects the core tenets of insurance, risk pooling, customer privacy, and security.
Many in the industry seem fixated on our failings ... I’ve learned to appreciate how far we’ve come and how much we have to celebrate.
I think we can all be proud of how the insurance industry responded to the tectonic shifts of the pandemic. Insurers, in particular, should take great pride in providing protection to so many families. Our work is far from over. The pandemic and its ripple effects will continue to play out in the coming months and years. Insurance helps people in their darkest moments, and we must continue to work together to fulfill this noble purpose. If we do, I believe the industry will emerge from this crisis stronger than ever and better equipped to meet the challenges that lie ahead.