8 megatrends impacting the insurance industry

Jim Kerley  Chief Membership Officer, LIMRA and LOMA

Jim Kerley
Chief Membership Officer,

Quesnay sat down with Jim Kerley, Chief Membership Officer with LIMRA and LOMA, to get his insights on key changes in the insurance industry - such as operational efficiency, distribution evolution, and omnichannel customer experience - and why it’s an exciting time to work in this industry.

Jim brings nearly fifty years of professional experience serving the financial services industry as a manager, leader, advisor, and consultant. In his current role as Chief Membership Officer, he provides industry research-based perspective and business consulting to executive teams globally.

Prior to his current role, Mr. Kerley was President of LIMRA Services, Inc., responsible for global product development and member relations for LIMRA’s the United States and Canadian members.

Q&A With Jim Kerley

What are the Megatrends impacting the insurance industry today?

The megatrend is the digital transformation of our industry - that is impacting virtually every aspect of our business. There are 8 primary elements of change:

  1. Market opportunity resulting from increased market access and awareness through digital tools and technologies.

  2. Distribution evolution, as industry players are moving towards more digital tools for customer service, engagement, and lead generation. Traditionally, insurance companies have relied on individual sales representatives or brokerage relationships to sell their products.

  3. Omni-channel consumers, so our industry needs to be present in a full-service way from traditional brick and mortar sales offices to digital channels such as apps and social media platforms.

  4. Operational efficiency, driven by the need for carriers to upgrade and modernize legacy systems that have been serving customers for over 100 years.

  5. Implications of regulatory compliance and complexity.

  6. Product evolution driven primarily by progress in predictive analytics capabilities to evaluate and predict risk more efficiently. Over time, this will evolve in two ways: 1) a simpler purchasing process and 2) more channel-specific product offerings.

  7. Digital and data partnership solutions driven by the need for companies to advance the digitization of their businesses - I think we will see a lot more partnerships between startups and legacy companies, as opposed to disruption. The most disruptive startups will likely be in the distribution space, evolving beyond the traditional approach of relying on individual sales rep to sell insurance products.

  8. Talent requirement to be able to build insurance companies of the future. For example, there is an increasing need for data scientists. LOMA is in the process of developing an insurance immersion program designed specifically for data scientists and the startup community, building on our existing Insurance Immersion program.

What are the critical areas / gaps where insurance companies have to invest to stay ahead of these trends?

Insurance companies are already investing significantly to meet the dual objectives of being part of a new customer journey and being operationally efficient.

Companies are using a few different approaches: being focused on running their businesses as efficiently as they can, enhancing digital tools for agents, channel expansion, focusing on customer experience via chat bot solutions.

The introduction of Agile methodology is also a huge trend and is being adopted widely to drive efficiency in managing change. Companies are using scrums and scrum masters to create short-term sprints of activities to create successful change. At LIMRA, we are exploring ways to provide professional services around the adoption of Agile methodology.

Why is it an exciting time for the insurance industry?

There is a significant market opportunity in insurance for anyone looking for a challenge and the ability to drive change:

  1. There is a wide gap and need to help consumers with retirement planning. 340BN of life insurance needs to enter the market every year. However, there is a large, underserved market around retirement planning. On average, every American is short hundreds of thousands of dollars in insurance at a minimum and a lot of Americans are not saving enough for retirement. We also know that when a retirement plan is developed, people save more.

  2. The opportunity for transformation with new technologies and business models is huge. If you want to help an industry change, there is no better industry to help become contemporary than Insurance, which is worth trillions of dollars. $1.5BN is paid out a day in benefits to the US marketplace in long-term care, annuities, and life insurance.  

  3. Young talent will help drive this change. Millennials joining the workforce are thoughtful and care about social causes such as financial inclusion. This month, across college campuses in the US, we will see the first graduating class of Gen Z. The future is here and the Insurance industry will provide an exciting, challenging, and rewarding outlet for their talents.

Quesnay thanks Mr. Kerley for providing valuable insights into the insurance industry