The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or positions of Legal & General America or of its parent company, Legal & General Group.
As Yogi Berra (and others) have said, “Making predictions is hard, especially about the future.” But as a leadership team we at Legal & General America (LGA) make predictions. Specifically, we carefully track external trends and distill them into a set of predictions, which then inform our recommendations.
For 2024, here are my personal top five predictions, and five recommendations for the U.S. life insurance market.
See also: Insurance in 2030: What Does the Future Hold?
Predictions
1. 2024 will be the year that the wellbeing of the 65-plus population becomes a mainstream topic of conversation for their children
A spike in long-term care needs, driven by pandemic deferred medical check-ups, will help adult children realize their parents have gotten older and may be ill-prepared to handle all of the financial, administrative and emotional needs.
2. GLP1 – analogs will be partially subsidized by a life insurer
In 2024, a reinsurer or actuarial consulting firm will publish a plausible protective value paper that shows the benefits at point of underwriting for long-term use of diabetes medication for weight loss. Expect a carrier with a large block of high net worth whole life to roll out a discount on prescriptions to follow.
3. The first life insurance policy will be underwritten by a large language model (OpenAI’s ChatGPT, and Google’s PaLM) - leading to a consulting arms race
We will see the public announcement of a generative AI “co-pilot” analyzing the risk of life insurance applicants in conjunction with a human underwriter. That will trigger a tidal wave of FOMO, pushing board rooms around the U.S. to hire consulting firms and system integrators to rush out conversational AI projects in claims, customer service and new business.
4. US cash-value products will continue to shrink
Indexed universal life (IUL) insurance products, which until last year rode a wave of premium financing, will continue to face major headwinds in 2024. Combine that with annuity 1035 focused distributors, and these products could be a tough sell in this economy for nervous customers – who may be consciously conserving cashflow, e.g. increasingly switching from annual modes to monthly.
5. Digitized underwriting will accelerate – helping make term life insurance more profitable
LGA and a few other companies have rolled out digital underwriting processes that drastically simplify the case management burdens for distributors – essentially making it zero touch, almost 50% of the time. Fast-moving distributors will move to consolidate their term life insurance business with companies that make it increasingly profitable for them to help their advisers and customers get affordable protection.
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Recommendations
1. Travel to see that prospect, client, partner
The rich information exchange, high fidelity and focused attention of face-to-face business meetings trump all the advantages of Teams, Zoom, etc. .
2. Exploit generative AI through feature-rich software
While deploying a LLM is likely too large a lift for non-software engineers, everyone can easily dip their toes in the generative AI waters by using a tool like Notion or Adobe Firefly.
3. Develop a customer engagement strategy
Marketing content will become so affordable, and ubiquitous, that what really matters will be customer activation, and engagement with your content, driving tangible actions from your efforts.
4. Encourage your clients to come up with a plan for their parents (and in-laws)
From what to do with the dining room table, to how to fund long-term care, embrace that awkward talk with your siblings, spouse and parents about their wishes.
5. Promote the value of professional advice
Given a flood of AI-generated op-eds and social media echo chambers, search engine research now has marginal value. Help your clients see the importance of consulting with an independent life insurance broker, estate attorney or registered investment adviser to get personalized expert counsel.
Now that I’m finished predicting the industry’s biggest impacts for the year, I’m off to play the Powerball.
