Resuscitating Life Insurance for the Digital Age
March 30, 2019 by Tony Laudato
The shock of the global financial crisis put life insurance, as an industry, on the back foot. A period of de-risking and retrenchment inevitably followed as companies looked to consolidate their positions and weather the storm. A decade on, and much of this necessary work has been done. The life insurance sector is on a much firmer financial footing, and growth is back on the agenda. Indeed, for many providers, growth is now vital. An aging population means mounting payouts, thanks to policies of old which were designed when data painted a different picture of risk than the one we see today. Securing new sources of revenue is crucial.
There is a huge problem, however: the “pie” of potential customers for traditional life insurance offerings simply isn’t what it used to be, and grows smaller every year. Whereas in the mid 20th Century it was something that most households purchased as a matter of course, younger generations tend to view it as optional at best, if they even consider it at all. The number of U.S. households that hold life insurance of some sort is now at a 50-year low, and according to trade association LIMRA some 38 million households don’t have any form of life insurance at all. According to a recent study by the same organisation, less than 20 per cent of millennials indicated an interest in purchasing life insurance at any point.
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