In life insurance and annuities, the promise has always been unwavering stability and resilience. Insurance companies have adapted to the times by being measured and purposeful, living their commitment to providing long-term security. The last decade challenged this paradigm, having introduced a relentless wave of innovation, including contactless underwriting, consumer demand for digital-centric interactions, the office impact of the COVID-19 pandemic, the entry of private equity, and rapid fluctuations in interest rates, with the looming threat of declining asset values already requiring another round of new investment strategies, product revisions, and balance sheet optimizations. 

In 2022-23, the steep upswing in interest rates presented the most attractive sales opportunities since the variable annuities arms race of the early 2000s. Simultaneously, the emergence of ChatGPT and generative AI (GenAI) has ignited a hype cycle, compelling business leaders to confront how they should use GenAI – and how much it will reshape the industry. 

While much has been written about the transformative impact of these changes, operations teams are left with the “how” of navigating the often-conflicting demands of policyholders, distribution partners, regulators, competitors, and business leaders. In 2024, they must make progress in three areas: 

• Organizational resilience  
• Customer experience 
• New technology value-realization 

As a leading advisor to the executive leadership of many leading insurance companies, we share what we know are strategic imperatives facing our clients as they adapt to the waves of industry change. 

1. Building Organizational Resilience to Adapt to the Unexpected  

As Benjamin Franklin famously said, “When you are finished changing, you are finished.” Despite the changes of the last decade, many insurance executives still see each change as an isolated incident, a perspective that limits their capacity to respond effectively. The industry needs to embrace adaptability as a core operational tenet.  

The most recent example is the inability of many to process a surge of new business applications for annuities. Many were caught flat-footed, left business on the table, and initiated waves of impromptu staff augmentation. In contrast, companies with a good understanding of their end-to-end business processes and a culture of operational excellence systematically identified, eliminated labor-based bottlenecks, and kept up with demand. 

In 2024, leading insurance operations teams are simplifying complex processes and enhancing resource flexibility. This “Resilience Journey” has four steps and insurers are moving through each – based on their own starting point – in ’24: 

1. Map the organizational landscape to find vulnerabilities: Mapping end-to-end business processes uncovers inefficiency and vulnerability, e.g., why tell call center teams to reduce cost per call the root cause is a lack of self-help options (chat bots, etc.). Too many operations teams have not yet invested in creating an “end-to-end” view of the business to integrate and optimize siloes (call centers in the example above), perpetuating functional independence that cannot effectively respond to external shocks. 

1. Create a process-aligned data ecosystem: Consistent, complete, and accurate data is the lifeblood of resilient operations.  At step 2, leaders plot how data is collected, used, stored, and governed by data owners and consumed by major business processes to maximize the use of data to create better, faster operational outcomes. The immediate prize is fewer operational errors, greater automation opportunities, and faster and more secure integration with customers and technology partners. The resilience benefit comes from taking labor out of the process and creating more timely and accurate insight into work-in-progress. For example, new business transactions awaiting medical requirements from third parties delay revenue recognition. Automating data capture to increase management visibility will both mitigate and highlight stress on the system due to volume or other factors. 

1. Build a culture of resilience: At this stage, leaders instill resilience into the fabric of the organization in very specific ways. Governance of technology investments includes resilience as a criterion. Employee training and goal setting begins to incorporate some aspects of organizational resilience. Corporate messaging sets and reinforces expectations of leaders and teams on the topic of resilience. For example, narratives around events that could have disrupted operations but did not due to employee forethought and planning, makes resilience come alive in the culture. 

1. Scenario planning: Scenario planning enhances an organization’s ability to react to shocks by having already worked through and socialized potential responses, thus accelerating decision making in the moment. For example, how much will call volumes spike if the Fed makes five rate decreases in the next 12 months –why and for what type of products and transactions? In that scenario, what would our current response be and what options would we need to consider if that one is not attractive? Once an operations leader has built the process, data, and human capital programs to deliver resilience, the value of scenario planning is magnified. 

In the last 24 months, we have seen leading insurers recognize and implement operational resilience programs. For example, one market leader built an enterprise-wide licensing capability onto its end-to-end new business process map that significantly reduced the time and effort required to respond to regulatory requirements by up to 20 percent. In another example, the insurer began cross-product training – and employees now actively seek opportunities to enhance operational resilience. Reliance on external surge capacity went down.  

2. Strengthening Customer Experience & Distribution Partner Integration 

While everyone knows delivering a mobile-first, seamless digital experience is no longer a choice, but a necessity, many do not realize how quickly insurers are mobilizing on consumer experience (CX) in ’24. While many carriers were hesitant to believe there was a return on CX investment, that has been slowly changing and hit a tipping point, driven by technological advancements and the emergence of Insurtech firms. Exceptional digital experiences are now more affordable and distribution partners and consumers are beginning to hold insurance companies to the customer experience (CX) standards set by other consumer-facing industries. 

We see operations team adopting one or more of the following strategies: 

Completing the CX Vision and Implementation Plan  

Some insurers have not yet set their complete CX vision – having tackled selected pieces of the customer journey before now. They recognize CX programs can yield substantial returns, but now must build a complete CX vision and implementation plan, underpinned by business cases that create value through increased share of wallet, greater asset retention, and attracting a younger generation of customers. The CX Plan is defined by five critical pillars: 

• Customer Journey Mapping: Being intentional and organizationally aligned on all customer touchpoints and ensuring the company provides customers with a consistent and modern-day experience aligned with the brand value proposition. 
• “Moments of truth” SWAT teams: Revamping the most important touchpoints in the customer journey, based on direct customer research (focus groups, customer interviews, operations, and other data). For example, one up-and-coming UK insurer has a less costly, digital-only offer, that also has immediate, world class, high touch support for certain claim activities. They are “overdelivering” on a moment that matters, enabled by very low cost to serve in all the other interactions. 
• Process Streamlining: Improving performance can often result in reduced operating costs via digitalization and automation, while maintaining high service standards. Multi-channel customer processes recognize the oft-cited “moments that matter” to customers and provide high- or low-touch solutions when one or the other is needed.  

• Distribution Partnership Alignment: Fostering closer relationships between distribution partners and policyholders, forging deeper connections, and enhancing customer loyalty.  
• Brand Evolution: Developing awareness-raising campaigns on the client experience. A recognized brands for fantastic service experiences helps revenue by reducing the cost of new customer acquisition and increasing retention. 

Radically Enhancing Omni-Channel Self-Service 

When done well, self-service reduces waste, enhances customer experience, and increases the speed with which transactions are processed and issues are resolved. Radical self-service starts as “Why can’t a customer do it all themselves?” as opposed to the more traditional approach of selective automation. In ’24, there are no more excuses not to accelerate self-service: the tools have proliferated, customer preference is clear, and it saves money (ultimately benefiting both the carrier and policyholder).  The underlying ingredients to this approach are: 

• Breaking down product silos with a universal online account registration process, making it easier for customers to navigate and access their accounts. 
• Implementing a secure yet user-friendly two-factor authentication (2FA) mechanism enhances security while maintaining user-friendliness.  
• Adding easy access to information, reducing inquiries for basic policy, payment, or policy data. 
• Streamlining mobile and web interfaces, offering one or two-click access to the most common inquiries and transaction requests to simplify customer interactions.  
• Integrating service channels so customers can switch seamlessly between them for a single transaction, for added flexibility and convenience.  

For insurers with captive agents, self-service offerings need to be dynamically rendered to reflect the presence of an agent and the ability to obtain service also via the agent if that is an offering of the agency as part of their client relationship management. When there is an agent, and the customer completes a self-service transaction, the agent needs to have visibility of it as a trigger for outreach.

Elevating the Distributor Experience 

For years, insurers have grappled with whether to think of only policyholders as their customers or if their distributors/producers are also, in some respects, customers as well. 

As we go into 2024, the answer is increasingly obvious – they are both customers. Understanding, supporting and elevating the distributor journey is critical to operational success for life insurers.  

When it comes to the distributor experience, the goal to solve for, is improvement in year-on-year agent performance and retention of the highest performing agents. There are three key drivers of performance and retention – the level of complexity and consistency in processes set up for distributors, the extent of training and support provided to agents, and finally, the analytics and tools made available to them. Reimagining or elevating the distributor experience to optimize these factors is critical to placing new business and achieving portfolio growth targets. This is even more important for carriers with independent agents, where a competitor’s simplified digital processes could result in agents selling more of the competitor’s products. 

To address the needs of distributors seeking a modernized, digital experience, one forward-thinking life insurer launched a unified digital platform. They revamped the website with intuitive navigation and personalized dashboards. Digital onboarding was streamlined, offering seamless policy purchases. Self-service options radically expanded, allowing policyholders to manage accounts, update beneficiaries, and review policies. 

To enable transparency and efficiency, another carrier developed a dedicated partner portal, offering distribution partners a unified platform to access resources, submit applications, and track the status of their clients’ policies. The portal fostered collaboration and transparency between the insurer and its distribution partners. The insurer invested in training, offering online modules, product guides, and webinars. This unified platform elevates the user experience, fosters collaboration, and drives growth, retention, and satisfaction. As a result of these efforts, over 10% of their agents were able to progress into higher performance tiers in the subsequent year. 

3. Using New Technology to Accelerate Operations Transformation 

Established companies can struggle with innovation, and in life and annuities it can seem that most of the innovation drive is directed at small changes to existing product lines. Technology innovation is squarely happening in the marketplace, not within non-technology corporations. The means to harnessing technology innovation then is understanding the offerings in market for licensing or companies in the market that may be seeking investors or co-development partners. Operational leaders in 2024 should therefore consider the following: 

• Increase Exposure to Emerging Technologies: Insurers should make a commitment to target small investments, pilot partnerships, tech community sponsorship and employee training. With this deeper understanding of emerging technologies and best practices can enable competitive advantage when applied to the right use case.  
• Re-evaluate Investments: As private valuations continue to reset, insurers should evaluate the ongoing relevance of current investments, and seek opportunities to secure new ownership stakes in companies that are more likely to bring valuable capabilities to the brand. 
• Explore AI: AI has the promise to be a game-changer, but no industry has fully explored what is possible and few companies in any industry have moved from generative AI pilots to generative AI “at-scale” deployments.  Given the power of AI, it demands rigorous governance, establishment of safeguards, and experimentation to understand the costs, potential and limitations. All of which takes time. 2024 will see large, established vendors, e.g., MSFT, Google, and Apple, deploying generative AI functionality to enhance their consumer products. Meanwhile, leading insurers will be testing and piloting some of the many function-specific solutions primarily in the customer service domain. In 2024 insurers just getting started should purposefully explore the vendor landscape, assess interesting vendor solutions and adopt a governance framework that will determine how and where generative AI should best be deployed. 

With that said, leading insurers continue to explore the space. Recent examples include: 

• A large US life insurance company that was challenged with lengthy manual underwriting processes, slower policy issuance and customer service delays began implementing Robotic Process Automation (RPA). This allowed them to streamline and automate their underwriting process, claims processing, and routine customer service inquiries, leading to enhanced operational efficiency, improved customer satisfaction, and better resource allocation.  

• Another insurer is investing in AI to improve data intake (collection, collation, and summarization) for underwriting data. They believe they can achieve more accurate and timely ratings, which could provide a competitive advantage. 

2024 is likely to be an inflection point for the life insurance industry. Consumer expectations have never been higher, the rate of externally driven change has never been greater, and the power and proliferation of technology solutions is expanding geometrically. By embracing the priorities outlined in this white paper – from operational resilience to customer-centricity and technological innovation – life insurers can not only thrive in 2024 but also lay the foundation for a bright and stable future.