Profitable growth is top of mind for life insurance execs
October 24, 2023 by Press Release
WINDSOR, Conn., and BOSTON, Mass., Oct. 23, 2023 – A new study reveals profitable growth is the most important challenge on the minds of C-suite executives in the life insurance industry, followed closely by talent management.
When the same study was conducted in 2019, change management was what kept executives up at night. By 2021, as companies were forced to meet customers’ changing needs, executives’ focus shifted to technology.
The study, conducted by LIMRA and Boston Consulting Group (BCG), surveyed C-suite life insurance executives to identify their greatest challenges and the biggest external forces affecting their business and their priorities for the future. The report, “What’s on the Minds of Life Insurance Executives 2023: Six Big Opportunities in an Evolving Market,” is being released today.
A third of executives (33%) said profitable growth was their company’s greatest internal challenge, which has been in the top three for the past three studies. Technology is also an important challenge and less than a third of executives (27%) consider their companies well equipped to meet that challenge. Executives surveyed said digital automation and data science and analytics were the top technologies needed to ensure their companies’ success over the next five years.
More than 6 in 10 respondents (66%) said investments in customer service technologies (such as chatbots and other uses of artificial intelligence) is a priority, along with modernizing legacy systems and improving business processes.
“Our research suggests life insurers will need to adjust to successfully compete in this evolving business environment. Executives surveyed had a number of strategies for growth. Some plan to narrow their focus on higher-profit margin products. Many are looking to modernize their technologies to create new market opportunities and find operational efficiencies. In addition, many are enhancing the tools they offer to advisors to enable them to better engage their prospects and clients,” said Alison Salka, Ph.D., senior vice president and director of research for LIMRA and LOMA.
When it comes to life insurance sales, advisors are often the ones working with consumers. Insurance executives recognize the need to invest in tools and insights to help them build and maintain relationships. Nearly 2 of 3 executives identify advisor enablement as a top distribution challenge.
Demand for life insurance has grown to unprecedented levels, with near record-breaking premium levels in both 2021 and 2022. Findings from the 2023 Insurance Barometer Study from LIMRA and Life Happens suggest that more than 100 million U.S. adults need insurance but don’t have it or don’t have enough.
“Consumers’ increased desire for life coverage makes this an opportune time for life insurers to address protection gaps around the globe,” said BCG Managing Director and Partner Rob Sims. “The goal of the 2023 study is to provide insights into the highest priorities of life insurance leaders as they tackle today’s challenges and embrace emerging opportunities.”