How The Insurance Industry May Change by 2023

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The life insurance industry may look very different in a few years time and many of the issues its grappling with now may be problems of the past.

A panel discussion at the recent Financial Services Council ‘Shaping Futures’ Conference, speculated on how the industry may have evolved by 2023.

The panellists included LifeDirect’s Jaime Monaghan, R&G Consultants Principle Roy Norris, and Service Assist’s Barry Read, with the panel discussion facilitated by Goodreturns Managing Director, Philip Macalister.

The role of the adviser was explored alongside the rise of robo advice, with Norris explaining that, as robo advice captures more of the market, it may leave the adviser, “…fighting for the high net-worth clients that actually want advice and need advice that are not captured by these algorithms. I’m not saying they will capture everybody and there certainly is going to be a role for the adviser”, he said.

Read said a change in conversation was needed around what insurance does as opposed to what insurance is, in order to prompt more action from consumers in realising the benefits of insurance cover.

“…we all have our place to play in the market and if we work together on these things, we can certainly improve the image that we have to consumers.”

Norris noted that increased access to personal data, collected from wearable sources, may help to reduce non-disclosure issues as more data is captured that a client might need to disclose.

“If we are able to use it properly and clients trust us to use it properly, it’ll take a lot of the non-disclosure issues out of the equation” Norris said.

Sales incentives were also discussed, with Read anticipating that overseas trips would still be on offer in 2023.

However, Monaghan said she hopes those kind of incentives will no longer be a part of the industry by then.

“I think as an industry, we don’t have a particularly good rap in the public and these things help to distance peoples’ views on that – so personally I think there shouldn’t be overseas trips but where you draw the line on that is a difficult one,” she said, adding:

“In five years time, I think that we will have… a more aligned industry. We’ll be working better together and there won’t be these conflicts between advisers and there won’t be these debates…I think we all have our role to play in the market and if we work together on these things, we can certainly improve the image that we have to consumers.”

Norris was in agreement with Monaghan and said soft dollar incentives are past their sell-by-date and should be especially by 2023.