How is digitalisation transforming the wealth assurance sector for the better?
David Liebmann, Head of Distribution & Sales Innovation, Lombard International Assurance.
Unsurprisingly, the past 2 years have significantly accelerated the development of the digital agenda within the wealth assurance sector.
Even pre-pandemic, evolving demographics were driving the need for engaging digital solutions that delivered tangible benefits for wealth managers, intermediaries, clients and insurers. In an increasingly complex and globally connected world where business practices are permanently shifting towards more automated interactions, the need for continuous digital evolution is greater now than ever.
Our European Wealth Assurance Report shows that three quarters of wealth professionals across Europe, predict that the level of digitalisation over the next three years will be either ‘high’ or ‘very high’1. In addition, consulting firm Pericles concluded that 94% of Luxembourg life insurers believe that digitalisation will no longer be a competitive advantage, but will in fact be a ‘must have’ imperative. The trend is clear, but not necessarily what this wave of changes means for brokers and wealth advisers in terms of opportunities and risks.
First and foremost, digitalisation strategies must have substance over style, placing stakeholders’ needs and requirements at the forefront of planning, design, build, test and implementation, with subsequent upgrades. Lombard International Group’s research has shown that wealth professionals have expressed modest satisfaction with the current digital offering from wealth assurance providers (scoring 2.89 out of a 5, with 5 being “very satisfied”)3. Is this frustration due to the limited availability of digital services or to the fact that these solutions do not meet their needs?
When executed well, digitalisation undoubtedly enables companies to grow profitably and sustainably. Digitalisation offers a better experience for all stakeholders by saving time, increasing efficiency and providing instant, secure and complete access to information. Technology also enhances the integration and automation of key operational processes, such as the analysis of risk profiles or the instant verification of information in anti-money laundering (AML) controls. For intermediary partners, it strengthens their ability to advise and service their clients. For example, being able to monitor a life insurance policy onboarding process and access consolidated reports reinforces their role as a distributor, in line with their regulatory constraints. Their clients can benefit from an easier, swifter and more secure onboarding experience. Electronic signature reduces risk and further improves service quality, offering the possibility to subscribe fully remotely. And even for the insurance company, digital tolls offer significant improvements in operational efficiency, greater flexibility, as well as better management of flows and volumes. Ultimately, digital is making things easier, more efficient, and providing higher added value to all stakeholders.
Blending human interaction and digitalisation is critical to delivering operational and service excellence. Digitalisation brings automation which in turn enables the insurance company to deliver greater efficiency throughout the entire lifecycle of a life insurance policy. Overall, digital technology should not be viewed as a silver bullet, but as a complementary and value accretive tool in delivering an engaging client experience, whilst at the same time improving operational efficiency. This nexus is the very essence of digital transformation, or perhaps should we say digital integration. This is because digitalisation cannot work alone in isolation without the talent and expertise of people-to-people interaction. Whilst the vast majority of wealth management professionals have high expectations on digital, this only becomes relevant when their primary needs are fulfilled, i.e. human interaction, expertise and a relevant value proposition.