Welcome!

Search Authors: Pat Romanski, Jim Kaskade, Elizabeth White, Liz McMillan, Jnan Dash

News Feed Item

Life insurance 2020: Rapidly-changing industry has four ways to survive, according to PwC report

Forces shaping change should be seen as opportunities, not threats

NEW YORK, Nov. 27, 2012 /PRNewswire/ -- The life and pensions sector is facing a rapidly-evolving and competitive environment. According to PwC US's "Life Insurance 2020: Competing for a Future" report, companies operating in this sector will need to cope with major social, technological, environmental, economic and political factors and take advantage of emerging opportunities to survive over the next 10 years.

(Logo: http://photos.prnewswire.com/prnh/20100917/NY66894LOGO )

These factors powering change in the sector have the potential to drastically impact the role of life and pension insurers. Some of these market trends include: an aging population increasing demand for retirement income and pension solutions; advances in "big data" and analytics allowing insurers to design products that minimize complexity and meet consumers' need at different life stages; continued risk of government welfare cutbacks, which could shift retirement and benefit decisions back on consumers; shifting economies across the globe in developed and emerging countries; and increasing medical advances (e.g., wearable health monitoring devices, personal genomics) coupled with rising medical costs are increasing risks for consumers and highlighting the need for "well-being" and other pro-active health management programs.

"To survive in the long term, life and pensions companies will need to actively identify and handle threats as they emerge, rather than passively responding to market changes," said Jamie Yoder, PwC's US insurance advisory practice co-leader. "Insurers will need to focus on simplifying the presentation of products and features to customers and advisors, while overcoming a complex set of processes at the back end".

The "Life Insurance 2020: Competing for a Future" report identifies four key themes and related risks that insurers need to address in order to grow. They are:

Two-speed global growth: The overall market for life insurance is increasing in emerging markets and decreasing in the developed world, particularly in the U.S. and Europe. In the U.S., life insurance assets as a percentage of overall household financial assets have been steadily decreasing over the past two decades.  Leading up to the 2008 financial crisis, life insurance was viewed more as an investment, as opposed to a protection product, though guarantees and protection have been viewed more favourably since that time. In addition, the demographic changes occurring in the U.S., such as aging Baby Boomers, are creating a growing market for retirement planning and retirement income.

"Growth for insurers in the life and retirement market will come from expanding into new customer segments, such as middle markets, and alternative distribution channels, such as worksite and direct, by offering more comprehensive advice and developing innovative solutions. However, insurers have to compete with other financial service providers to capture this market and therefore must create capabilities to reach a broader part of the market," added Yoder. "With these new markets, insurers will need to spend more time educating consumers on the value of life insurance and pensions.

Distribution disruption and the customer revolution: Responsibility for retirement planning and ancillary benefits has the risk of being pushed from governments and employers to individual consumers. Since customers have become accustomed to the convenience of digital education, research and transactions when they want, where they want and through any channel they want, distribution of products is changing rapidly.

"The role of advisers is evolving because their advice is only one source that customers use for planning," said Yoder. "Since customers now have control, they demand more information and convenience from many channels when choosing life and pension products. In addition, customers are demanding advice about a range of financial products, as opposed to a narrow set of insurance products."

With the uncertainty surrounding the economy, customers expect honest advice for their life insurance planning. Today, consumers aren't sure if they need life insurance anymore, and since the product is complex, they need dedicated advisors who can tell them exactly how to spend their money at every stage of their lives.

Information advantage through "big data": Leading insurers are turning to advanced analytics and external sources of data from purchases, social media and other digital means to understand customers better. The challenge for insurers is using that data when developing new ways for tailoring products for customers.

"We will see financial service providers use 'big data' analytics to design products that adapt to the changing needs of the household as they move through different life stages" said Dr. Anand Rao, principal overseeing innovation in analytics within PwC's US insurance advisory practice. "Advice will be tailored based on age, making it simpler for consumers and advisors, while automation and analytics hide the complexity of insurance products."

Big and fast—evolving business models: Advancements in technology are allowing new players to enter the market with new business models that have a lower cost structure.

"To compete against these companies, traditional insurers need to reinvent their operating models to reduce cost structure, simplify their offerings and organize around customer interactions," said Yoder. "Companies will also need to streamline their procedures and reorganize their talent to focus on high-growth markets and customized solutions."

About the PwC Network
PwC firms help organizations and individuals create the value they're looking for. We're a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.

© 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

SOURCE PwC

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...