1、Six Big Opportunities in an Evolving MarketWhats on the Minds of Life Insurance Executives 2023OCTOBER 2023Growth is the top challenge for life insurance companiesSources:BCG and LIMRAs 2023 global survey of life insurance executives;BCG analysis.Note:New ways of working was added as a category in 2

2、021.1The challenge appears only once among the top challenges since 2019.Top challenges by year202120192023Change managementCustomer experienceGrowthDistributionInnovation1TechnologyCompetition32%23%22%19%19%18%16%TechnologyInterest rates1GrowthRegulationCustomer experienceChange managementNew ways

3、of working137%26%24%22%21%20%19%GrowthTechnologyTalent management1Change managementProfitability1DistributionRegulation33%28%26%24%23%21%20%Insurers should take advantage of six opportunities to address growth and other key challenges Sources:BCG and LIMRAs 2023 global survey of life insurance execu

4、tives;BCG analysis.123456Focusing the portfolioPersonalizing the journeyHelping advisors to help clientsModernizing technology from front to backPartnering to accelerate innovationAttracting and retaining talentMutual insurance companies have grown their market share,while public companies have focu

5、sed their product portfolioSources:BCG and LIMRAs 2023 global survey of life insurance executives;executive interviews;BCG analysis.Note:pp=percentage point;P&C=property and casualty.1LIMRAs US Retail Individual Life Insurance Sales Survey,20132023,and LIMRAs estimates.FOCUSING THE PORTFOLIOIndividu

6、al life insurance by premiums written1Public companies continue to narrow their product offeringTOP TEN MUTUALS MARKET SHARE(%)TOP TEN PUBLIC COMPANIES MARKET SHARE(%)33432013202210 pp2823201320225 pp2022220232022MetLife spins off its US retail business,which launched Brighthouse Financia

7、l MetLife sells its US P&C business to FarmersPrincipal Financial Services sells its retail business to Sixth StreetPrudential Financial sells its retirement business to EmpowerAIG spins off its US retail business,which becomes Corebridge FinancialCorebridge Financial sells its Irish health care bus

8、iness to AXA51%Share of respondents who plan to focus on products with higher profit margins as a top-three strategic priorityLeading carriers are enabling data-driven personalizationSources:BCG and LIMRAs 2023 global survey of life insurance executives;executive interviews;BCG analysis.Note:The con

9、version rate is the percentage of qualified customers who buy an insurance product.PERSONALIZING THE JOURNEYThe customer experienceand the critical capabilities that enable itwill drive growthSuccessful one-to-one personalization meets four customer needsSimplifying the customer journey will enhance

10、 the customerexperience and improve the conversion rateThe ability to engage customers in meaningful ways will be critical to persistency over time.An in force management executiveShare of respondents who view data science and data analytics as crucial to successShare of respondents who view custome

11、r service technologies as crucial to success66%74%Right engagementRight channelRight productRight timeMany insurers are focused on improving tools and offering insights to help advisors build and maintain customer relationshipsSources:BCG and LIMRAs 2023 global survey of life insurance executives;Wo

12、rking with Intermediaries 2.0,LIMRA and the National Association of Independent Life Brokerage Agencies,2022;executive interviews;BCG analysis.HELPING ADVISORS TO HELP CLIENTSAssisting advisors requires investmentNew capabilities are being deployed to meet advisors needsShare of respondents who iden

13、tified helping advisors as a top distribution challenge60%Share of advisors who chose service and relationships as the top reasons for using an independent marketing organization69%Lead generationand analyticsHolistic adviceAutomation Ecosystem-based leads(from social media and partners,for example)

14、Propensity models Outbound engagement and marketing tools Personalization solutions Interactive outreach solutions(for example,data intake apps)Co-browsing and co-pitching assistance Customer calls that include an insurance expert Financial planning tools Straight-through processing methods Self-ser

15、ve account updates Chatbots Automated remindersThe consolidation of IMOs and BGAs is an expanding threat to carriersSources:BCG and LIMRAs 2023 global survey of life insurance executives;executive interviews;S&P Capital IQ;BCG analysis.Note:IMO=independent marketing organization;BGA=brokerage genera

16、l agency.1The big three life and annuity distributors are AmeriLife,Integrity Insurance,and Simplicity Group.HELPING ADVISORS TO HELP CLIENTSConsolidation trend in distribution is top of mindAs distribution consolidation threatens margins,carriers are making several strategic movesShare of responden

17、ts who ranked consolidation as a top distribution challenge50%Number of M&A deals made by the big three aggregators of life annuities,2022150Investing in affiliatedagenciesAcquiring distributionPartnering with IMOs and BGAs for product developmentExecuting hybriddistribution strategiesTechnology mod

18、ernization is table stakes for long-term success,and leaders do not believe their companies are preparedSources:BCG and LIMRAs 2023 global survey of life insurance executives;executive interviews;BCG analysis.Note:NLP=natural language processing.MODERNIZING TECHNOLOGY FROM FRONT TO BACKTechnology is

19、 a top challenge that insurers are not prepared to addressInsurers are investing in technology across the value chain,and automation,data science,and analytics are the most crucialRespondents ranked technology among the top three challengesOnly 27%of respondents consider their company prepared for t

20、he challenge Digital automationData science and data analyticsCustomer service technologies(such as chatbots and NLP)Cloud technologies(such as cloud at scale)Business process managementLegacy systems andmodernizationCybersecurityDigital marketingDistribution technology77%55%52%61%Artificial intelli

21、gence andmachine learning57%66%60%57%74%60%RESPONDENTS(%)Technology modernization falls behind several new capabilitiesInsurers are actively partnering to achieve key strategic goalsSource:BCG analysis.Note:EHR=electronic health record.PARTNERING TO ACCELERATE INNOVATIONEnhance agent efficiencyWorki

22、ng with a digital native underwriter to issue coverage in less than ten minutesEquitableBestowImprove customers longevityOffering rewards for healthy choices and tools that customers can use to improve their overall well-beingJohn HancockVitalityEmbed insurance at convenient purchase points Promotin

23、g policies outside of the traditional life insurance purchase journeyHaven LifeKinlyEnable simplified digital product salesOffering consumers simplified and less expensive life insurance products digitallyAmeritasEthosUnderwrite policies profitably and quickly with expansive data setsAccelerating th

24、e underwriting process by providing access to hospitals EHR systemsNew York Life InsuranceCernerStreamline back-end functions and manage expensesIntelligently sourcing data to resolve claims quickly and minimize costsPacific Life InsuranceAppianCompanies are also partnering to reduce risk,although i

25、nvestments from private equity firms are beginning to attract regulatory attentionSources:S&P Capital IQ;SNL Insurance data set;Dow Jones Factiva;Life and Annuity Specialist;BCG analysis.1Modified coinsurance is a type of reinsurance where the ceding company retains the assets with respect to all po

26、licies reinsured and also retains the total reserves on the policies,while transferring the investment risk.PARTNERING TO ACCELERATE INNOVATIONNew partners are strategically sharing risk via coinsurance and reinsurancePE-backed competitors have advantaged financial approachesRegulators are increasin

27、gly attentive to offshored risk$350 billion$800 billionModified coinsurance reserves for US life insurers(the 20-year average is less than$200 billion)1Numerous reinsurance deals were ceded from the originating insurer,sometimes to a carrier with an inferior credit ratingPE-backed carriers significa

28、ntly outgrew the industry average of 15%over the same time periodRegulators are initiating discussions on solvency and policyholder protectionOffshored life insurance reserves by year-end 2022(about 20%CAGR)AtheneGlobal AtlanticFinancial Group+78%+122%REVENUE GROWTH,20182022 Talent management is a l

29、eading challenge,and rapid industry changes require insurers to plan and act now to build the workforce of the futureSources:BCG and LIMRAs 2023 global survey of life insurance executives;LIMRAs survey of chief human resource officers;BCG analysis.Note:UX=user experience;UI=user interface.1These are

30、 only a few examples of roles and skills.ATTRACTING AND RETAINING TALENTThe ranking that respondents gave to promoting employee engagement when companies are focused on retaining talentThe share of the insurance workforce that is age 55 or olderThe ranking of the insurance industrys desirability amo

31、ng entry-level employees(the scale was 1 to 10,where 1 was the most desirable and 10 was the least)125%9thNew roles and skills neededKey actionsDigital roles1Data scientistsProduct managersUX and UI talentDigital marketersReassess the hiring process and job requirementsDevelop programs to reskill and upskill talentBuild ecosystems of shared,temporary talentBuild a strategy and infrastructure for remote workTwenty-first-century skills1Creativity and agilityCritical thinkingCollaborationDesign thinking