Blood tests and Facebook: Life insurers reveal their to-do list for 2010

Emerging from the economic downturn, life insurance carriers look to step up their profitability by improving their underwriting processes and embedding social networking into their business models.
Or at least, that’s the takeaway from a new report from Aite Group LLC. The report notes the life insurance industry is recovering from a year of falling revenue, with sales of variable annuities, universal- and variable-universal life insurance all off.
Going into 2010, insurers are looking to replace their policy administration systems in a bid to speed up product design and rollout. Though insurers had indicated that replacing their policy administration systems would be a priority in 2009, Aite Group predicts that this will be a greater area of focus this year.
Carriers also want to revamp their underwriting, once again aiming for a faster — and undoubtedly cheaper — process. The report noted that carriers are looking at “tele-underwriting,” which involves using call center employees to perform medical interviews. They’re also keen on using blood tests to search for markers of heart conditions, rather than relying on statements from attending physicians and treadmill stress tests.
The report found that insurance companies will also play up their use of social networking and integrate the burgeoning medium into their business models; many of them already have Facebook and Twitter pages.
The keys to success, according to the report’s author, Aite senior analyst Clark Troy, will be using social media to reach out to the sales forces and providing guidance to producers on using social media. Social networking could be a way to appeal to Generation Y, according to the report.
Emerging markets present another opportunity for life insurers in 2010 as western companies jump at the opportunity to acquire stakes in or establish joint ventures with companies in Asia, according to the report.
MetLife Inc.’s decision to buy up American International Group Inc.’s American Life Insurance Co. for $15.5 billion is one example, as it expands MetLife’s reach into Japan.
Mr. Troy also believes this is the year that life insurers get serious about developing business intelligence and analytics programs.
. Historically, some companies have had a hard time integrating information technology with other corporate structures. As a result, IT groups might not be synced up with other lines of business, according to the report.
“Sales-aligned IT groups develop systems on platforms complying neither with enterprise IT standards nor with Sarbanes-Oxley stipulations, often by consultants with minimal interest in enterprise integration,” Mr. Troy wrote.

Life insurance carrier trends for 2010:
• Driving enterprise agility.
• Re-inventing underwriting and new business processing.
• Embedding social media.
• Jumping into emerging markets.
• Leveraging business intelligence and analytics.