The survival of life and well being insurers threatened by supply-side disruption could depend upon their skill to innovate and court docket two key demographics, in line with a brand new report from Accenture.
In its Insurance coverage Income Panorama 2025 report, the worldwide consultancy agency stated that whereas insurers have traditionally been in a position to depend on buyer retention charges hovering round 85%, there are indicators that buyers in private traces received’t be so sticky shifting ahead.
“We anticipate nearly 5% of worldwide premiums—roughly US$280 billion—to be impacted by improvements in merchandise (US$140 billion) and shifts in the direction of digital third-party platforms (US$140 billion),” Accenture stated.
Specializing in well being/wellness and life merchandise, it projected that US$120 billion in revenues will likely be in play over the subsequent 5 years, together with US$60 billion in sensible well being merchandise, US$30 billion in direct life and wealth administration merchandise, and $30 billion in services and products for getting older populations.
“By 2050, one in 4 individuals dwelling in Europe and Northern America might be aged 65 or over,” the report stated. “In 2018, for the primary time in historical past, individuals aged 65 or older outnumbered kids underneath 5 years of age globally. … The variety of individuals aged 80 years or over is projected to triple, from 143 million in 2019 to 426 million in 2050.”
With revolutionary new services and products as a part of a associate ecosystem, insurers may be capable to higher serve seniors, improve revenues, and delay the necessity for all times, incapacity, and longer-term care claims. Such customers, the report added, are more and more expressing a want for merchandise to assist construct and keep wholesome habits to increase their lifespans and promote higher high quality of life.
The report additionally pointed to a ripe alternative for insurers to include revolutionary expertise into insurance coverage merchandise for millennials, a demographic well-known for being digital natives.
However an total slip in belief, the report stated customers are more and more open to sharing their private information with insurers in alternate for one thing of worth.
“Rewards for information sharing may come within the type of decreased premium or perks and reductions on non-insurance services and products,” Accenture stated. “They may additionally come within the type of real-time well being and wellness steering based mostly on consumer attribute or conduct information.”
The willingness of millennials to share private data, the report stated, could enable insurers to slender threat swimming pools to a extra correct extent than they’ve been in a position to traditionally. On the identical time, they might additionally be capable to maximize the lifetime worth of millennial customers with presents that defy the standard indemnity mannequin.
“Millennials and youthful customers are particularly enthusiastic about insurance coverage presents that steer them within the path of security, sustainability, and holistic bodily and monetary well-being,” the report stated.