Transcription:
Patti Harman (00:06):
Welcome to this edition of The Dig In Podcast. I'm Patti Harman, editor-in-chief of Digital Insurance. We're at the beginning of a new year, and this is often a time when people tend to take stock of where they are financially and consider what changes they might want to make this year. An important financial planning vehicle in the insurance space is life insurance, and AI and other technologies are changing how it's sold, the binding process, how agents interact with customers, and even the options that are available.
Joining me today to discuss all of this and much more is Samantha Chow, Global Market Lead for Life Annuity and Health at Capgemini. Thank you so much for joining us today, Sam.
Samantha Chow (00:51):
Thanks for having me, Patti. It's great to be here and happy New Year to you as well.
Patti Harman (00:55):
Thanks. Like every aspect of the insurance industry, the life insurance space has changed significantly. How has the buying process improved over the last decade or so, especially with the advent of these new technologies?
Samantha Chow (01:12):
I think really the buying journey itself has improved mostly because the access that individuals have to doing their own research, to helping them understand, to making sure that they're armed with the right information. So that when they do sit down with an agent or an advisor or someone's coming at them and trying to sell them something, they have a little bit more knowledge and feel better than they did in the past. Obviously, it's a lot better to sit down on a computer and type out information than it is on a paper application. That back and forth process, not in good order, has improved as a result of the digital applications that we have. Makes it a little easier for our agents, makes it easier for the policyholders as they're trying to go into new contracts. So it's kind of streamlined, but to me, the most important improvement in this digital transformation, this digital world, is the access that consumers have to data and understanding what these products are.
(02:16):
They're complicated enough as it is.
Patti Harman (02:20):
Right. And it's easier for them to just get information and it's available twenty four/seven, which they have become very used to, I think.
Samantha Chow (02:28):
Instant gratification.
Patti Harman (02:29):
Absolutely. So there's a perception, I think, that life insurance is something that our grandparents or parents had, but usually if I'm in my 20s or 30s, that's not something I need just yet. Do you think that these perceptions have shifted and is the industry doing a better job of showing younger generations its value and why they should look at buying it when they're in their 20s and 30s as opposed to maybe later on?
Samantha Chow (02:59):
I use a great example here. Every time someone asks me a similar question, my grandmother, when she was born, her grandmother purchased a policy for her. $1,000. That was back in those days. She was born in 1929. When my mother, my aunt and uncle were born, their grandmother purchased a policy for them. When my brother was born, and he and I are seven years different, they bought a policy. My grandmother bought a policy for him. When I was born, no one bought one for me. Reason being, let's think about the economic changes, the financial crises, the great depression, hiding money under the bed, all of these different things that we've experienced or those past generations have experienced. We don't experience that now. The 20-year-olds today have not really, I don't care where you sit globally, experienced that financial crisis, the Great Depression. So they don't see the relevance in it.
(04:07):
They see it as death insurance. To answer the second part of that question, is the insurance industry doing a good job of explaining why it's important now? Not really, but we've never really done ... And I say the collective we, because I put myself in there, we've never done a good job at talking about why it's important at the younger age. And I see, like I said, this education, we can go out and search the education, but if we don't know what the questions are, the right questions to ask, we're still not going to come back with ChatGPT saying, "You need a life insurance policy."
Patti Harman (04:43):
Yes. Very true. It's interesting because when I was born, my parents bought me ... It was, it was a small life insurance policy. And when I got married, I didn't even think about the importance of that till I bought a house or I had my first child. And then you begin to see, okay, there are certain things I need to plan for further on down the road, which is a great way to illustrate the value of that. And along those lines, my next question kind of dovetails with that because for decades, the life insurance has been seen strictly as a benefit that the policyholder really didn't get to experience. However, as we're seeing things change and needs change, it's really evolved to provide some new and exciting living benefits for policyholders as well as other financial options. Can you share a little bit about some of these changes in the different products that you're seeing?
Samantha Chow (05:44):
Yeah, there's been a lot as of late in terms of positioning these products as something that can be used for living. And part of it's just the education because it's been there. The ability to take a loan out on a policy or get access to your cash value, those things have been there. So the bigger thing I've seen is more around, say, the annuities. You put all this money into your annuity. Yeah, it can pass on the net next in line, but being able to get everything out of it if need be, use it for long-term care, use it for disability income, those are new facets. There's also that flexibility in how you establish what percentage of that policy to go into an investment fund versus just being there for the life insurance policy. You're seeing more of that. So I have an opportunity to invest more of that life policy, more of my premium and investment and less in the life and shift that over time, which is fabulous.
(06:52):
Again, I'm all about the examples. 22 years old, my son is 22. My oldest at the age of 21, somebody said to me when I got into the business at the age of 21 that you need a life insurance policy, so dictate 21, your turn. And he says, "Well, I don't need a life insurance policy. I'm perfectly fine." And I said, "Yes, you are perfectly fine, son, but it'll cost you a fraction today. Then when you really need it, it'll be there. And like me, if you want to buy your first house with your cash value, you can. " He came back with a policy that was a critical illness, long-term care, disability, and a whole life cash value, all bundled in one. It's Guardian Life's 360. He says, "Look, mom, if I crash my motorcycle," because he does a motocross, "and I hurt myself and I can't work, well, then I'm covered because of disability.
(07:53):
If I get cancer, I get critical, I'm good and you don't have to take care of me if something happens and I need long-term care."
And I'm like, "Fabulous." So that's what they're looking for. And when the education is there and they do a good job of explaining it, they see the value in it.
Patti Harman (08:13):
Very true. Wow. I remember I had one policy and my agent said to me, "Oh, are you aware that if you need long-term care or if you need short-term disability, or again, if you get really sick, all of that is rolled in. " And I was just so surprised, and well, this has been a while now, but I just remember being amazed at how flexible it was because that was not the perception that I had when I first got the policy.
Samantha Chow (08:41):
Right. And if I can add on to that, because I think this is extremely important. When we talk about the change in education and how we access things, individual life insurance, and then you have your group benefits too, your workplace benefits, and there are wellness benefits built in. Most people don't know that. So at the end of the year, while I know I need to scurry real quick and get my wellness benefits in for my critical illness, my accident, my hospital indemnity plans, I'm blasting out to everybody I know, "Don't forget to do it. Don't forget you can get your $50 back." But they don't know. They're not aware and we're not educating. So people don't see value when we're not educating them on how well to use these products.
Patti Harman (09:28):
So true. You can't go anywhere these days without hearing about the impact of technology on our lives. In what areas are you seeing it have the most impact in the life insurance space? I will say, I've been watching this. It's exciting to me as somebody who covers the industry. So I'm anxious to hear what you've seen or what you're thinking.
Samantha Chow (09:51):
It's funny, everybody always laughs when I say I'm in the life and the insurance industry. They're like, "Oh, okay." No, it's so exciting. There's so much change happening continuously. Yes, we're decades behind, but that just means we have so much more to do. Where technology and AI, for me, to me, I think the biggest changes that I'm seeing in the most positive impacts are in how we service and manage these policies. When it comes to underwriting, when it comes to service and being proactive, getting out in front of the customer, helping them understand, educate on how to use, I've seen a lot of that take place. In addition, I think the other places I see are around our agents and our advisors and how we're helping them understand their customers, understand what products, match those products and those customers together and do it in a proactive fashion, understanding your customer portfolio, what you're good at, what you're not good at, how to get better at certain things.
(11:07):
So it's really kind of all around and it's in little pockets, but we have to be able to attract younger agents and advisors in order to attract that younger generation of buyers as well. And starting there with our agents and advisors and educating and giving them the tools and helping them understand how things work together, and we've seen so much of that, especially with our clients here, that it's helping tremendously. And so my fear of not being relevant in an industry anymore or not being a relevant industry anymore, I see that silver lining now. I see it coming back and coming back fairly quickly as well.
Patti Harman (11:58):
And it's interesting because even with all of the technological changes, insurance is still based on relationships and it's who you know and who you can talk to. And all of this, I don't think is going to change that at all.
Samantha Chow (12:12):
I don't think so. I agree with you 100%, Patti. I do think that there's going to be a segment of the population that is just, they're smart enough or educated enough to know exactly what they need and they manage everything and that's fine. Great. But their life insurance in general, no matter how much we educate or share, it's complicated. It needs to be explained. It needs to be part of a bigger portfolio to support your family, your retirement, et cetera. So no, I totally agree with you.
Patti Harman (12:44):
Yes. But it's interesting because there's all of this technology and everybody wants that Amazon experience where we have access to information and we can do things online twenty-four/seven. Are you seeing this trend with life insurance as well? And are online sales options, are they helping or changing how consumers are interacting with their agents? Do they start maybe online and they realize, "You know what? I don't know as much as I thought and I really do need to talk to somebody about this. " Or how is it changing that interaction then?
Samantha Chow (13:22):
I think it's not necessarily changing the interaction as much as it's giving more opportunity to interact in different ways. Again, my examples here, my 96-year-old grandmother who recently passed, she pays all her bills online, everything. She goes on her iPad. My 22-year-old wants to do everything online, but still he'll call a friend and then he'll, if he absolutely has to, we'll call the agent, if you will. My 21-year-old will do some research and then say, "Nope, I need to talk to somebody or I need to see somebody face-to-face." My husband won't even pay the mortgage without writing a check. Me, I'm somewhere in the middle of all that depending upon the scenario. So what it's done is create an opportunity for say you, Patti, the agent advisor to have an open channel of a chatbot or something to answer a client's question or to have your own personal website and then say, "Oh, I'd rather talk to you or let me talk to this chatbot, see if I can figure it out.
(14:34):
Now I can't. So can we call? Is there someone I can click and call a Teams call or what have you? " It just gives the option to them. And in doing that, I think provides more comfort. Used to be it's only a 800 number or only a website that you can go to. Now I have options.
Patti Harman (14:58):
Yes. And I think people like having those options. And again, it's like you said, it depends on what the situation is. If I just have a quick question, then yeah, the chatbot is great, but if I have a number of different questions or it's something I need explained to me, then I definitely need to talk to someone for sure. Absolutely. Yes.
We're going to take a short break now. We'll be back in just a few minutes.
Welcome back to The Dig In Podcast. We're chatting with Samantha Chow, global market lead for life, annuity and health at Capgemini about the future of life insurance in 2026.
So a significant number of insurance professionals are expected to retire in the next few years. What type of impact is this expected to have on life insurance sales? And we've talked about this a little bit earlier, but are companies having trouble attracting millennials and Gen Z talent to work in this space now?
Samantha Chow (16:00):
Yeah, that is a serious challenge. When these current agents start to exit and retire without predecessors, without sharing their learnings and understandings of product that is old, these are old products. They're not bad products. When I say old, let's not confuse that with bad or outdated products, but they're old products that have been around for eons. They're not easy, not straightforward, they're complicated. And there's a way to sell. There's a way to help your prospects understand the value that it brings to the table. So when they do exit, its tribal knowledge is exiting with them. And as an insurance industry, life insurance specifically, the trouble with attracting a younger generation is it's not just that they don't necessarily see the relevance in the products because they don't, and we're trying to change that. We talked a little bit about education and we're doing more of that's great.
(17:13):
We need to educate the workforce too, to understand the colleges, to understand what this brings to the table. But in order to do that, you can't do that with paper applications and a CRM that says, bring your network of people that you know and plug them in there and go after it, which is what everything was before.
(17:39):
This is no longer just who's your 10 or 15 closest family members. You need to be able to access, use technology, use AI to access lead generation, to understand the individuals. This is where AI and technology are coming together to help support that new agent and advisor pool. And without that, they're not going to be successful. And not only because of the exit of this generation of great agents and advisors, because the carriers and insurers, they don't have the time to educate like they used to. They don't have the education programs in place like they used to. So they need to depend on this AI and digital technology to educate them coming in to this new program that they've got.
Patti Harman (18:36):
Yes, that is so true. And they miss a lot. Even though AI can capture a lot, it's that reasoning behind, this is why we do it this way, or this is why you have to ask these questions, or these are the things that you need to focus on. And that only comes from experience, from doing it for years and years and understanding these are the questions that someone is going to ask you or this is what's valuable to them. And I don't think AI is quite to that point yet.
Samantha Chow (19:09):
No. And this is also why you see generational families that have been in this business for so long. To be able to pass those experiences down and to be able to see how lucrative the opportunity can be, but to understand the ins and outs of it, this generational pass down is really kind of the key to the success of our industry, but it's not going to be enough if we can't fuse the other areas.
Patti Harman (19:42):
Yes, very true. Although the rapid adoption of technology, it is making it easier, I think, in some respects for people to see the value of working in the insurance industry now. Would you agree that it's maybe helping them to attract agents and younger customers in some respects? And are there areas where they could improve their technology or options to make it easier to target these particular markets? I'm thinking in terms of data science, and I think there are some areas that lend themselves to it.
Samantha Chow (20:20):
Yeah. I mean, I think when it comes to our younger agents or newer agents coming into this, the tools that I'm seeing become more successful in helping guide our typically AI-based third-party data integration, utilizing journey mapping and understanding age and location and where they are in their particular life's journey. Pulling all that together, combining that with what are the policies that we have. If I'm a captive agent, what are public policies I have access to to sell? Where do they fit? Helping them pull the puzzle and the story together, that's where I've seen some of the most beneficial for these younger agents coming in to be able to really hone in and sell better in those kind of challenged and restrictions that we just spoke about.
(21:18):
I think that the other part of this, when it comes to the technology in our consumers and how we can interact with them is also changing. Being able to easily design triggers to reach out to our customers, reach out to our book of business as an agent, not just the birthday cards anymore. It's not just that. These are real personalized things that are driven by data and data science and where they are in their journey, trying to be proactive and get out there and also showcase to them when you think they might need help or how they might be able to access some of their policies' cash value. We see you might be in a little bit of a bind here, you can take this and how it works. And so I think it's there to help build the relationship. And I think if we don't continue down that building the relationship path, that doesn't mean I need to talk to you daily, doesn't mean I send you an email daily, but to be there for them and showcase that you're there for them, that's really going to be the key in how we use this successfully.
Patti Harman (22:28):
I totally agree with that. Just knowing that you can reach out when you have questions, that it's not this great unknown, that there are people there and they can answer your questions if you have them.
As we're at the beginning of a new year, are there any trends or changes that you see coming into the life insurance space? And are there any areas where you think there might be some significant transformation, whether it's the sales process or underwriting, those types of things?
Samantha Chow (22:59):
So I think for me, I think there's a couple of different things. Obviously, I think we're going to see a huge amount of mainframe exit this year. I think the confidence and the ability and the support of AI to help some of these insurers exit the mainframe. And I'm not saying they're going to modernize this data. I'm going to say you're going to see a bunch of that exit and that's great news because that will help enable a lot of the other things that need to happen because now I can be a little bit more flexible. I can utilize AI a little better. I am now establishing a much more secure data estate to access my data and use AI. So to me, that's the crux. If we can't even get that, then we're not going to be able to use any of the other things.
(23:53):
That said, when it comes to trends, underwriting for me is another area that I'm seeing great things in.
(24:04):
The utilization of external third-party data, electronic health records, medical records, whatever term you use are now ... I mean, most people are using, most medical facilities are using those tools. Access to that is greater. I think we're looking at at least 90% coverage. So to be able to utilize that information now in that underwriting process, talk about instant gratification. So here we are, it's at the crux and we have the ability to use it where we haven't before. It's been a dream. So underwriting to me is a huge opportunity and an area I see a lot of waves being made throughout the course of this year. The third trend I'll say is that I'm seeing a little bit of a transition around the AI and say our chief AI officer officer or chief AI strategy officer in place, whatever acronym or title you want, creating a higher level strategy that's straddling across the organization.
(25:22):
The biggest concern I have for our industry is now not just ... We have technical debt, and especially the life assurance industry, it suffocates us, and we're trying to get out of that now, but we don't need the next wave to be AI technical debt. And so I see some recognition in that. And as a result, that higher level umbrella strategy in which the organizations can use AI across the organization without replicating, recreating, pulling in new tools, duplicative tools, et cetera. So I see a little transition in that so that we can attain AI at scale.
Patti Harman (26:09):
Right. There's so much involved with utilizing it. I'm glad you talked about the changes in what you're seeing in the underwriting area. As I've watched that across the entire industry, that has been one of the most fascinating areas for us because I don't think people realize the amount of data that is out there. And if you're able to harness that and really synthesize it into something that you can use, that's game-changing when it comes to determining risks and coverage and pricing and all of these other aspects of it.
Samantha Chow (26:46):
Yeah. And it links directly to claims too. So once you have that, once you have that down, it feeds directly into claims and provides another great opportunity. We talk about the exiting of the agent, but we also have this exit of the baby boomer community that is expiring. And as a result, you got this wealth transfer. We need asset retention through claims and guidance through claims. It's not just, okay, I need to pay this claim, which isn't easy, by the way. Even when it's a 96-year-old policy and should be not questioned, it's not easy. It takes over a month to get done. So I think to my point before, these things lead into one another and they're reusable across. So once you've learned and you've tested and you've learned and you've adjusted and you can use that in other places across the organization and capitalize on those things.
Patti Harman (27:51):
Very true. We touched on this a little bit earlier, but is there anything that concerns you about how the industry is using technology, how it might affect the industry going forward or even affect consumers and customers, that sort of thing?
Samantha Chow (28:12):
Yeah, I think we've touched a little bit on it, but my biggest concern, especially when it comes to the use of AI, is that AI technical debt, I've referred to it and how we tend to be siloed. And again, I put myself in that we because I live the carrier world myself, but we tend to be siloed. It's underwriting, it's claims, it's service, it's new business, it's marketing, it's sales. And to my point, if I go and most projects end up being vertical based, I have a claims project, I've got a claims problem and no one talks to underwriting about, "That's the same problem we've got over here. How do we solve this? We used AI. Oh, we have APS summarization. Oh, well, I kind of use APS over here too." So my biggest concern is while we're doing great things to exit the mainframe and create that flexible ecosystem, more modern ecosystem that's going to be able to grow and develop with us enable the AI, we're going to end up at a similar situation with this AI situation if we don't really hone in on that upper level overarching end-to-end strategy and aligning across the organization with business and test.
Patti Harman (29:40):
I agree. That's very true. Although it's been interesting, as I have watched and spoken to carriers as they're implementing AI, I'm seeing that it is starting to break down those silos because nobody can really operate just in claims and just use AI and claims because it has that trickle down effect and it goes across the entire ecosystem of a company, and then protecting the data and managing what even goes into AI and where it goes and the access and that sort of thing. All of those are important aspects, I think.
Samantha Chow (30:15):
Yeah. And I think that again, to layer just one more thing to that is a lot of these are platform providers, policy admins, these startups that are doing excellent jobs, by the way, at creating AI in underwriting or claims or service, those AI tools are only usable within that module. And so if I'm over here and I have my individual life insurance claims use this claim system, but I also sell or benefits or group life insurance, but I have to use a separate claim system, they're not the same experience. So you have disparate experiences and that's not a good thing either. So I challenge our technology providers out there to enable those AI tools outside of their own personal box so that you can have that centralized experience. And I challenge our insurers to think about what that next kind of API or AI layer is that will help you build those tools out and usable across the organization for a single customer experience.
Patti Harman (31:34):
So is there anything that you're looking forward to or that excites you about what's going on in the industry or what is evolving and will really be significant in the next 12 to 18 months?
Samantha Chow (31:48):
I am looking forward to new product. That's what I am looking forward to. I saw a little, get a little taste of that towards the end of latter half of last year, and I am very excited about seeing what the insurance industry is going to come up with.
I am also very excited to see how insurers really break away from their very strict, rigid way of doing business and their ability to test and learn with AI and get comfortable with it. We talk about how the insurers are investing in the people, AI talent, but don't smother them. Don't sit them in your box because as fast as AI changes, you don't want to slow their pace of changing either. They need to be able to think outside of your four walls and keep pushing you as well as your partners. You need both. AI just doesn't happen here in your company.
(33:01):
It has to happen outside and you have to marry the two together to make sure you're staying on top of things. And I think the last thing that I'll say, Patti, is that technology and AI are the one thing that an insurer can do to create their own unique fingerprint in the market. Life insurance is life insurance, annuities are annuities. Everybody might have a little nuance of product here and there, and I expect to see more diversity in that. But how you service, how you do work with your customers, your agents, your brokers, your distribution partners with AI and technology is what makes you unique and what makes others want to do business with you.
Patti Harman (33:47):
That is so true. That's a great way to summarize that. We've covered a lot over the last half hour or so. Is there anything that I haven't asked you that you think is important for our listeners to know?
Samantha Chow (34:00):
I think we covered a lot, Patti. I think they've got a lot to think about and I'm sure they're working towards it already. Their strategies are in place. They're reviewing their three-year plan and their five-year plan. I think I said something to somebody the other day. It's like, there's no sense in putting a five-year plan together anymore. And if you do, it's got to be the highest of level because with the way technology and AI is changing the game, there's just no way to plan for that.
Patti Harman (34:27):
That's so true. I used to ask people, so what are you going to see in the next three to five years? And now it's like, what do you expect to see in the next 12 to 18 months? And even that is becoming a very long window because technology is just changing so quickly.
Samantha Chow (34:43):
Yeah. You have to be set up to be the fast follower if you're not going to be the leader.
Patti Harman (34:47):
Yes.
Samantha Chow (34:47):
So I think that's my last bit of advice. Set yourself up to be the fast follower. Be ready to pull that trigger if you don't want to be the leader.
Patti Harman (34:58):
Excellent advice. Thank you so much, Samantha, for sharing your insights with our audience. Thank you for listening to The Dig In Podcast. I produced this episode with audio production by Adnan Khan. Special thanks this week to Samantha Chow of Capgemini for joining us. Please rate us, review us, and subscribe to our content at wwwdig-in.com/subscribe. From Digital Insurance, I'm Patti Harman, and thank you for listening.
