Why Are There No Drones in Life Insurance?

What Is Holding Back Innovation?
by Tom Scales, January 23, 2017
North America

Abstract

Why are there no drones in life insurance? By this we mean, why is life insurance innovation lagging other lines of business?

Celent has released a new report titled Why Are There No Drones in Life Insurance? The report was written by Tom Scales, a Research Director with Celent’s Insurance practice.

While wearables and analytics are bringing technology and insights to life insurance, the fundamental process and approach have not changed in decades, if not centuries. The process to sell and service life insurance has been essentially stagnant, and the future of our industry requires change at the core of our thinking.

“The life insurance industry lags other insurance lines in innovation,” said Scales. We see exciting new offerings in P&C and health, but few in life.”

“We are seeing some exciting innovations,” he added. “We are hoping to see the pace and quantity improve.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

 

Key Research Questions

2

Life Vs. P&C/General

3

Why Are There No Drones in Life Insurance?

7

 

Inflexibility in Thinking

7

 

New Product Innovation Has Been Flat — For 30 Years

7

 

Millennials Don’t Want to Talk to an Agent

8

 

Our Leaders Have Been Here Forever — And So Have Our Employees

8

 

Agents Were Born Before the Computer

9

 

The Agent Is Our Customer, And They Like It that Way

10

 

We’re Not an Exciting Career Direction

11

What Is Holding the Industry Back?

12

 

The Application Is the Customer’s First Novel

12

 

You Want to Know What!?!

12

 

Too Much Third Party Information

13

 

What’s a Credit Card?

13

 

Cycle Time Is Measured in Days and Weeks

14

 

Our Technology Is Older than Our Employees

14

 

Risking Meltdown as Key Resources Retire or Die

15

What Can Life Insurers Do to Catch the Wind?

16

 

The Risk of Revolutionary Innovators

16

 

Amazon Did What?

16

 

So Do We Just Give Up?

17

 

Socialize the Issue

17

 

Invest in an Innovation Culture

17

 

Invest in Your Aging Technology

17

 

Open the Direct Channel

17

 

Take More Risks

17

 

Change the Culture

18

 

Transformation

18

Conclusion

19

Leveraging Celent’s Expertise

20

 

Support for Financial Institutions

20

 

Support for Vendors

20

Related Celent Research

21

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