The Question II

The Question is a new series on the Montoux blog - in each post, we pose a potentially controversial question to prominent members of the life insurance industry, to gather their unique perspectives. Read the previous edition of The Question here.

Today we ask:

How much of the market do you think could be sold to direct if we can overcome tech barriers, and do you believe face-to-face advice would still play a role?

I am not sure if the challenge is a technology issue or if it is the cost to finding the right individuals and then moving them to act.  The key to this business is finding healthy individuals and convincing them that having protection is important. Humans are the market proven and most cost-effective way of distributing individual life insurance and I don’t see that changing in the near future.  I actually believe the future is a combo of human and AI. Both will exist as standalone models, but the combo of human/AI will win long term.

- Andrew Gordon, VP and Actuary, Life Insurance Product and Risk, Guardian Life

The industry has basic problems with overly complex products, deeply flawed application processes, and generally crappy user experience. Some of these are tech barriers, but the upstream cause is usually cultural or a result of organisational structure or distribution strategy.

In this light, the direct market will grow as slow progress is made in these areas, but there will be an ongoing need for face-to-face (or remote) advice in many cases. And if a person has a complex situation, a face-to-face adviser is often simply a better option, particularly if the adviser is using tech smartly. I don’t have a guess for how this will play out in percentage terms.

- Conor Sligo, Consultant, Sligo Consulting

The development of robot advice capability will underpin the evolution of life insurance channels in the next 5-10 years. In the five year period, the face to face advice channels will adopt algorithm driven question structures to improve sales success, meet compliance obligations and reduce entry barriers to advice roles to meet the market needs for a younger more digitally literate workforce. In the 10 year timeframe, this evolution will support the development of the ultimate robo-advisers that will be the preferred experience for the majority of younger customers. This change to the life insurance industry will be no different to that occurring in other professional service industries.

- Sam Knowles, Director, Montoux

If you would like to share your own perspective on this question - or be part of a future post - please contact us.

Alice Jones