Tech investment shapes as bright spot for ‘beaten-up’ life sector
The life insurance industry is ripe for an overhaul and offers technology vendors an exciting untapped opportunity, Austbrokers Life MD Ben Donald says.
A tough five years and a sharp drop in the number of life insurance advisers is the result of a “dearth” of investment in the industry, he told attendees at this year’s insurtechLIVE last week.
“We’ve got a huge amount of demand and we’ve had a lack of tech investment, so I would have thought that makes this industry in particular something worthwhile investing in.
“We’ve been beaten up a little bit with legislation, but I think a truth nobody’s pointed to or realised is that a lot of our downward trend is a result of lack of investment in the industry.”
Mr Donald says he remains optimistic after government efforts to make life insurance and advice more accessible.
“Previously, maybe the top 20% of Australians would go get advice, because it can be an expensive endeavour.
“Now with the government changes, I think that’s going to expand to the mass market.”
The first issue to tackle is data flow, he says. Getting information from the insurer to the adviser to the client is “of paramount importance”.
"A lot of the time that still means advisers need to sit on the phone for 45 minutes on hold waiting to talk to somebody because that information isn't necessarily available online somewhere. I can’t imagine what it’s like for a client without an adviser,” Mr Donald said.
“That data flow is really, really important, a major thing. If we can get that right, you’re going to have massive client retention and really happy advisers as a reflection of that increase in productivity.
“You'll end up driving huge amounts of your business flows as well, because advisers want to do business with an insurer that makes it easier, not just in the front-end process but as an ongoing process.”
Mr Donald says technology should ease transactions.
“We can all go on our phone and change our investments, Netflix subscription, our health insurance subscription, but we can’t do anything to do with our life insurance, which is kind of upsetting. I would love to see something improved on that side.”
Mr Donald is an investor in Sydney-based insurtech LifeBid, which in October raised $1.45 million.
LifeBid’s digital platform enables financial advice providers and insurers to manage clients’ life insurance needs. It says it cuts costs by up to 90%.
Its main source of revenue will be monthly subscription fees from advisers, licensees and insurers.
LifeBid’s advisory board, comprising advisers, licensees and six retail life insurance companies, has been instrumental in designing the platform.
“It's about bringing value across every stakeholder in the value chain – the first piece of software I’ve seen that takes into consideration what the client, adviser, licensee, insurer and reinsurer wants, and it even involves government,” Mr Donald told insurtechLIVE attendees including insuranceNEWS.com.au.
“The proof of the pudding is that it’s been funded by advisers across the country.”