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Short-term policies will open new markets for life re/insurers: Hannover Re’s Laudato

5th November 2018 - Author: Matt Sheehan

New categories of short-duration life insurance products will allow re/insurers to access new markets and pools of customers, according to Tony Laudato, Vice President of Partnership Solutions, Hannover Re US.

tony-laudatoSpeaking in an interview with Reinsurance News, Laudato explained that short-duration policies, such as the one recently developed by Hannover Re in collaboration with InsurTech start-up Life By Spot, are using non-traditional distribution methods to reach whole new groups of potential customers.

By developing new products and distribution channels that focus on experiences, Hannover Re hopes to create entry points for new insureds, as well as supplementing existing coverage.

“There are needs for both short-term and long-term policies to serve our customers and close the coverage gap in the US,” Laudato said.

“Teaming with innovative companies like Life By Spot brings these novel products and channels to market so short-term and long-term policies can supplement one another to ensure customers are covered in all aspects of their lives.”

This is particularly vital among younger generations of customers, where levels of life insurance penetration have been declining for some time now.

“With younger generations focusing on experiences more than anything else, the ability to reach these customers at times when they are perceiving risk the most, they can see the value that life insurance can provide,” Laudato told Reinsurance News. “This greater awareness can additionally help the broader insurance market.”

Technological advancements in underwriting are also allowing the re/insurance industry to classify risks faster and more consistently, and it is vital that companies learn how to better integrate digital capabilities to adapt and change with the needs of the consumers, Laudato said.

However, traditional players will remain valuable even as new technologies begin to radically reshape the life re/insurance industry.

For example, in the partnership with Life By Spot, Hannover Re continues to provide not only reinsurance capacity, but also underwriting and mortality expertise, as well as risk sharing and consultancy services.

“The life Insurance market is continually changing and adapting,” Laudato concluded. “New channels are being introduced that are changing the buying process. We do not see the agent channel going away. They are providing a very valuable service to customers.”

“New channels can however start to bring products and services to new customers that previously had not been targeted by existing channels,” he added. “As these methods change, risk analysis and monitoring will be more important than ever.”

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