Prudential, John Hancock see life insurance transformation post-COVID

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At a time when consumers are hesitant to go out into the world and book appointments in doctors offices and insurance offices, they also want to ensure that their families are taken care of in the event of death. These circumstances have life insurance companies quickly transforming their services and offering digital options in the post-COVID era.

“The industry overall has fully embraced digital transformation and we are looking to undertake such an increased focus on analytics, automated underwriting, artificial intelligence, machine learning and to be capitalizing on the rich cache of data that most organizations have,” said Kartik Sakthivel, chief information officer at LIMRA. “The general consensus is that covid did not necessarily change projections for the transformation, it has just accelerated a bunch of programs that were already under way.”

Even before the pandemic, 75% of North American companies had invested in digital, according to a report from LIMRA. Another study from the organization found that only 21% of consumers have a favorable view of the economy and yet more people have high confidence in life insurers and financial professionals, according to a recent study from LIMRA.

Interestingly, in these difficult economic times, that faith has grown. While about half of consumers have consistently been confident in insurance companies and agents for more than decade, the level of consumers with “quite a bit” or “extreme” confidence is at an all time high. This is the time that people are relying on insurance companies and investing in insurance policies even as they forgo personal savings and retirement.

As consumers seek out these products and services, the lines of communication are quickly turning digital and insurance companies are making it easier than ever to purchase policies without having to physically meet another person.

Digital impact
Prudential, for instance, has taken advantage of its acquisition of Assurance IQ, to offer Prudential’s SimplyTerm term life product through the Assurance IQ platform, a move that deeper enables direct-to-consumer purchasing of life insurance.

The platform aims to address the $12 trillion life insurance coverage gap in the market, by making it easier to buy life insurance digitally where customers can access insurance products when and how they prefer. SimplyTerm enables individuals to get up to $1,000,000 in coverage for 10, 15 or 20 years online.

And Prudential has removed the paramedical exam requirements for new policies with face value of $3 million or less where possible. For policies in excess of this amount, they will make determinations on a case-by-case basis potentially expanding the use of electronic medical records, among other methods, to drive faster underwriting decisions. Prudential’s approach to innovation has been to create a more streamlined, simpler and intuitive process for customers. Their strategy is to think about the customer first and the technology will fall in line behind it.

“Consumer expectations are changing, and we need to be sure we’re meeting our customers where they are with the products and solutions that best meet their needs—it’s this outside-in approach that is fueling innovation in our life business,” said Salene Hitchcock-Gear, president of Individual Life Insurance at Prudential.

The health crisis has consumers beefing up on their coverage and this online shopping portal, which is now available in select states and will be SimplyTerm will be gradually rolled out across the U.S. (excluding New York), in the coming months.

“One key factor for us has been our acquisition of Assurance IQ, which is specifically geared to enable us to meet the insurance needs of consumers no matter their preferred shopping method,” Hitchcock-Gear commented. “As purchasing habits have changed during the COVID-19 outbreak, the Assurance IQ platform helps ensure we can continue to offer a seamless purchasing experience to middle market consumers.”

SimplyTerm is underwritten with PruFast Track, Prudential’s accelerated underwriting process, which makes it faster and easier for eligible clients in both direct-to-consumer and financial professional-sold channels to get life insurance by forgoing the need for medical exams. Prudential is also expanding the use of electronic medical records (Human API) along with other methods to drive fast decisions with minimal requirements. While many of these technology advancements aren’t new, the external environment has sped up their adoption rate.

“Across the board, we’ve increased our focus on digital channels to offer consumers more options in terms of how and when they engage with us—whether that’s exclusively online, with an advisor in a digital environment, or a hybrid approach,” Hitchcock-Gear said.

The insurance company has been expanding their use of digital tools including allowing e-signatures and secure email where possible. Additionally, their e-capabilities portfolio allows digital processing for the purchase of life insurance, from application to policy delivery. This includes digital submissions, interviews, reviews, delivery and service.

“While it’s still too early to understand the long-term impacts of this pandemic, in many ways, rather than charting a new course for Prudential, COVID-19 is instead accelerating our existing plans,” said Hitchcock-Gear. “That includes the adoption of new technologies and processes as our work has shifted to a digitally-driven environment.”

Processing apps
John Hancock has also been beefing up its proprietary electronic application platform, JH eApp, to make it easier for insurance agents and their customers to process applications digitally. The platform streamline and accelerate an experience that has traditionally been time-consuming and cumbersome with an "instant" underwriting decision via John Hancock ExpressTrack for applications of people aged 18-79 and all face amounts.

"Digital capabilities are more important than ever, and we are proud to be leading the way to meet the evolving needs and expectations of our partners and customers," said Brooks Tingle, president/CEO of John Hancock Insurance, in a statement. "This is an important step in our ongoing journey to advance our digital solutions, access new data sources, provide a better service to our customers, and, ultimately, grow our business."

While these digital options are still new, it is likely that more and more these options will become the new norm for an industry that has been steeped in an outmoded way of doing business. This reliance on in-person interactions means the industry has been slow to adopt digital, but things will likely evolve more quickly post pandemic.

“Things are far too manual requiring in-person interactions, physical signature, medical examinations and nurse visits,” Sakthivel said. “The more streamlined and more automated the process can be, the easier it will be. Equipping agents and advisors to be able to continue to create that level of engagement with a frictionless experience will be more common in the future."

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Life insurance Digital transformation LIMRA John Hancock Prudential