The group life insurance market in Latin America is poised for growth, with technology advancements helping improve customization to meet the changing needs of an aging population.
The group life insurance market in Latin America has undergone significant evolution in recent decades, creating both structural challenges and opportunities for differentiation. In this article originally published in El Asegurador, Luis Garcia, Chief Life Actuary for RGA Latin America, shares his vision of that market as a new year nears.
Despite existing tax incentives, group life insurance penetration in Latin America is low, which represents a significant opportunity for growth.
At RGA, we have actively identified and responded to some of the key trends that, in our view, are transforming the market. One of them is increased life expectancy, which is increasing the need for long-term protection, so we are designing solutions that adapt to this demographic reality.
The use of artificial intelligence (AI) in underwriting and fraud detection is also helping us improve accuracy, reduce costs, and expand access to traditionally excluded applicant profiles. Our team of data science experts is working on advanced predictive models to optimize underwriting and fraud detection processes and using external sources of information and data to help predict mortality without requiring customer disclosures.
Another notable trend is the customization of group insurance. The market demands flexible and tailored products, such as voluntary and modular coverage. RGA collaborates with its clients to design tailored solutions that increase perceived value without losing focus on profitability.
One of the main challenges in Latin America is the highly competitive market, which has led to a war over prices and terms. This compromises the profitability and sustainability of the industry in the medium and long term.
We can identify five key challenges:
To effectively meet the needs of companies and employees, it is essential to balance profitability, personalization, and perceived value, focusing on innovation, operational efficiency, and customer proximity.
Data analytics and automated underwriting are transforming group life insurance, promising to significantly improve operational efficiency, technical profitability, and commercial reach.
Some of the main advances we will see include automated underwriting processes, reduced response times, and lower administrative costs. All of this will directly influence an improved customer experience.
Technical efficiencies will also allow for better risk segmentation, premium adjustments, and loss anticipation, strengthening portfolio sustainability. We also expect greater reach and accessibility, facilitating access to underserved segments with more personalized and scalable products.
These tools not only optimize the operation and profitability of group life insurance, but also make it a more accessible, personalized, and sustainable solution.
In a highly competitive environment, where competition is not only about price and terms but also about response speed and operational agility, RGA Latin America has developed a tool for the optional placement of group life businesses called Fac Group Life, designed to respond quickly and accurately to quote requests. We already have this solution in operation in Mexico, and it allows our clients to receive a response in a very short timeframe, significantly improving market response times and strengthening their competitiveness.
At RGA, we are firmly committed to boosting group life insurance in Latin America through technological advances, operational agility, and innovative solutions that allow our clients to compete more efficiently and generate tangible value for employers and employees.
Learn more about RGA’s Latin American team today.
