;)
By
John McFarland
Life insurance professionals and financial advisors are increasingly turning to technology to enhance their service offerings and provide more value to their clients. This emergence of “insurtech” is reshaping traditional insurance processes, creating new opportunities for customer engagement and enabling more sophisticated policy management strategies.
“The insurance industry is on the verge of a seismic, tech-driven shift,” proclaimed a McKinsey & Co. white paper regarding the rise of Insurtech.
One of the more intriguing components of this revolution are Insurtech APIs (Application Programming Interfaces), which are transforming how insurance data is collected, analyzed and utilized. These powerful tools are enabling life insurance professionals to unlock previously inaccessible insights, creating a more holistic view that ultimately helps their clients maximize the value of their life insurance policies and explore liquidity options they may not have known existed.
Changing the Data Paradigm
Life insurance has traditionally been a very document-heavy industry, with policies stored in filing cabinets for decades and then in disconnected data silos more recently. Insurtech APIs change this paradigm by digitizing and standardizing insurance data, making it more accessible and actionable than ever before. These APIs connect disparate systems, allowing for seamless data exchange between insurance carriers, financial institutions and advisory platforms.
“For years, many insurance technologies operated as closed systems — like containment bubbles where nothing could easily get in or out — so adding or extracting information usually required manual data entry or clunky, labor-intensive downloads and uploads,” writes insurtech expert Jace Hopper. “With APIs, Insurtech can unlock new opportunities for innovation, and agencies and carriers are better equipped with the right information to improve their client experience.”
In the new Insurtech API data paradigm, there is interconnectedness that creates a comprehensive view of a client’s life insurance policy, enabling professional advisors to make more informed recommendations based on real-time data.
Enhancing Client Value Through Data-Driven Insights
The ability to draw meaningful insights from client data represents a significant competitive advantage for life insurance professionals and financial advisors. Modern insurtech platforms leverage APIs to deliver actionable intelligence that can transform client relationships.
Here are a few examples:
- Policy Performance Analysis — Advanced APIs can automatically analyze policy performance across multiple dimensions, including premium efficiency relative to coverage, cash value growth compared to projected values and interest crediting rates versus market benchmarks. Access to these insights enables advisors to identify underperforming policies and recommend adjustments that better align with their clients’ financial requirements.
- Liquidity exploration — Many policy holders are unaware of the liquidity options available within their life insurance policies. Insurtech APIs enable life insurance professionals to model the impact of policy loans on death benefits and future growth, compare surrender values across multiple policies, identify opportunities for life settlements and calculate available loan amounts based on current cash values. This allows advisors to present clients with liquidity options during financial hardships or when better capital deployment opportunities arise.
- Continuous policy surveillance — Modern platforms deploy sophisticated monitoring algorithms that continuously evaluate policy performance against established benchmarks. These systems can track premium payment patterns to predict potential payment issues before they occur, evaluate changing market conditions that might affect policy performance, and create an early warning system that alerts advisors to potential issues before traditional annual reviews might catch them.
- Personalized risk assessment — Advanced insurtech platforms can integrate external data sources through APIs to create more nuanced risk assessments, such as health data integration (with client permission) to identify potential underwriting issues or carrier strength indicators that might warrant consideration. These external data points allow life insurance professionals to anticipate changes in a client’s risk profile and make pre-emptive adjustments if appropriate.
Moreover, insurtech APIs can be leveraged to put in place automated intervention triggers that prompt advisor intervention. This could include critical policy anniversary notifications that might affect surrender charges or guarantees, policy lapse risk alerts when cash values approach danger thresholds, opportunity alerts when clients might qualify for better rates or products, or perhaps end-of-guarantee period warnings for term life policies.
These types of data-driven insights transform life insurance professionals from reactive service providers into proactive financial guardians, often addressing issues before clients are even aware they exist.
Turn APIs Into Value
Insurtech APIs represent a major breakthrough for the life insurance industry, but APIs alone are not enough to deliver value to clients. This requires a holistic view of all data points and related factors that provide a comprehensive assessment of a life insurance policy, based on automated processes and decision engines that render insights.
The only way to obtain these insights is to partner with a provider of insurtech services that are custom-designed to automate policy management for advisors.NSurTech Solutions revolutionizes life insurance management with a software platform that was developed with cutting-edge technology and industry-leading security. The platform transforms life insurance planning by empowering financial advisors with data-driven insights to hep mitigate risks, identify opportunities to maximize policy value and explore liquidity options with their clients.