It’s more than just tech: Why life insurance needs new payment models
By Dr Ulrich Kleipaß
Life insurance has developed downward in the last couple of years. The main reasons for that are a low-interest environment and old and traditional products that do not cater to the demands of a younger generation.
The attempt to overcome the crisis with more capital market-oriented products has largely failed so that a whole industry is looking for a replacement solution. Here, the solution could be the set-up of a fully digital insurance player with an end-to-end digital product. This helps to implement more efficient cost structures on the one hand and to reach new target groups on the other hand.
At the core of this concept however is a more flexible payment scheme that allows end customers to pay more or pay less into their contact and by this adjusting their payment plan to their personal needs. Thus, it is a combination of tech plus payment flexibility. In practice this development is mainly driven by three stakeholder groups:
1) Incumbents setting up their now products (e.g. Generali) or cooperations (e.g. One Life) to be active in this space.
2) Start-Ups to drive innovation (e.g. Getsurance or anorak), but still struggling with large regulatory hurdles.
3) Re-insurance companies (e.g. Munich Re and Hannover Re) to push the boundaries of their declining core business.
Overall it is an opportunity to increase turnover, simplify processes, acquire new customers and use PayTech for a better market position.