Life insurance doesn’t have a great reputation with consumers, and the tales of unreasonably rejected claims and poor sales practices revealed by the Hayne Royal Commission encapsulate why. For insurers and the advisers selling their policies alike, then, products that put clients front and centre are key.
For TAL’s chief information and innovation officer and the 2018 Money Management Women in Financial Services Life Insurance Executive of the Year, Fiona Macgregor, innovation is crucial to achieving this goal.
“A culture that encourages innovation and the capability to deliver on it are at the heart of being able to keep pace with community expectations,” she says.
“There is nothing mystical in how we approach innovation. Simply, we always start with the customer need and we do that through talking directly to people rather than sitting behind the glass in a focus group.
“There is no substitute for listening to your customers - and nowhere to hide if you’re not getting things right for them.”
LOOKING BEYOND TECHNOLOGY
When people think of innovation, minds often wander to technology. While that is an important part of the picture, Macgregor believes that in reality the start point is always customer need (or frustration).
One area where it is vitally important that life insurers innovate, for example, is in its responses to the growing recognition and prevalence of mental illness (and many companies are racing to work this out for their clients), and with the issues that longevity and its related illnesses pose to total and permanent disability (TPD) cover.
“More and more of us are living with chronic conditions and mental illness and our product design and their economics need to reflect that,” Macgregor says, showing that “starting with the customer need” when innovating can mean going to the heart of why they are seeking cover in the first place.
This could lead to innovation of the insurance industry itself: “This creates the potential to fundamentally shift our role in life insurance from one of purely protection to one that also focuses on prevention,” she says.
TAL’s Health Sense Plus program, for example, which is currently only available to advised clients but is being considered for rollout to insurance inside super members, rewards consumers who engage in healthy practices by offering discounts on premiums. These include having a healthy body mass index and taking preventative screening tests for health conditions.
TAL isn’t the only insurer in this space, either; AIA has been especially industry-leading in this regard, with its Vitality program that offers incentives for healthy living and exercise and discounts on relevant services and products. Zurich, too, recently entered that space with its LiveWell app, which offers new advised insureds healthy recipes, exercise tracking, and, again, discounts and incentives.
These initiatives tangibly benefit insurers’ bottom lines – Zurich cites evidence that clients that take more than 5,000 steps per day represent a lower claims risk – but also help insurers ensure they are both satisfying clients and meeting their changing role in society.
And according to Macgregor, this is a crucial reason innovation (beyond simply improved technology offerings) in insurance is needed.
“Taking an industry view there is the issue of sustainability. TAL paid out $1.62bn in claims last calendar year. That’s an important economic and societal purpose and we have a responsibility to keep our products, business and industry in good shape for the long term,” the 2018 Life Executive of the Year says.
“The question for all businesses in Australia today is: is good for our customers, good for us? And vice versa. And if not, find a better business model.”
Of course, tech still has a role to play in creating new services and approaches that help improve member outcomes.
Innovation at TAL, for example, led to the creation of TAL Claims Assist, which allows members to manage and track their claim application in real time via an app. This is important at a customer service level, Macgregor says: “I can track my pizza delivery or my Uber so I expect to be able to track something really important like my claim”.
For insurance inside super clients, too, tech innovation can improve outcomes. Macgregor points to TAL’s CORA digital support service, which helps members of five of its super fund partners during their return to health after a claim.
There’s also smart start-ups and promising companies out there developing their own technology that will help clients. “Regtech, for example, is very promising and, in particular, applications of artificial intelligence to enable 100% quality checking,” Macgregor believes. “That’s good for members.”