There is no shortage of risks in the financial services industry as we approach 2021.
But perhaps the greatest risk is the risk of lost opportunity, a LIMRA panel today suggested. The panel – Executive Perspective: Shaping Our Industry for the Future – noted that the COVID-19 pandemic is prompting consumers to better plan their financial futures with protective products.
“I think the risk, or the missed opportunity, would be to not move that over to the permanent side of protection, and over time, disbursement,” said Kweilin Ellingrud, senior partner at McKinsey & Co. “This would be a missed opportunity. “
The LIMRA virtual annual conference ends Thursday. The trade association released its third-quarter annuity sales figures Wednesday morning, confirming consumers are seeking retirement income and protection. Year-to-date annuity sales increased 19% to $ 191.4 billion, the highest sales in the first nine months since 2008.
“Consumers, when they think about their retirement savings and their life and risk insurance products, really, really have self-confidence,” said Neal Baumann, global insurance leader at Deloitte.
The panel discussed a number of other disruptions in the industry, including technology. The integration of technology can do wonderful things for insurers and consumers. For example, the John Hancock Vitality is a high-tech health incentive program that encourages policyholders to take care of themselves.
John Hancock initially offered the Vitality program only to new policyholders, but opened it up to all policyholders in 2018. The program allows some policyholders to get a Fitbit or Apple Watch to record their workout history in exchange for premium discounts.
But insurers need to be careful with technology going forward, Ellingrud said.
She gave the example of a big data discovery where a consumer buys and eats arugula, a leafy green plant that contains essential nutrients that help keep hearts and bones healthy.
“At first glance, this might tell me that you take very good care of your body, that you are in very good health, and that you probably have very good life insurance,” she said.
Sounds harmless, right? Not so fast. Buying arugula is also strongly correlated with very wealthy neighborhoods, Ellingrud noted, and very white neighborhoods. In other words, some underlying discriminations that regulators are examining closely.
“So at first glance rocket is not a racist and classist metric to watch, when you dig under it and get into that black box of analysis it can, in fact, lead to results that we are not. not collectively comfortable with, ”she said.
InsuranceNewsNet editor-in-chief John Hilton has covered business and other events in more than 20 years of daily journalism. John can be reached at [email protected] Follow him on Twitter @INNJohnH.
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