Five-Insurance Strategies for Today’s Consumer
Despite rising consumer expectations, the insurance industry is still built on a “one size fits all” economic model. To remain competitive, insurers must evolve their business models beyond traditional risk mitigation. In this article, we look at five key insurance strategies for today’s consumer. Read on to learn more. Para: Focus on providers that are likely to succeed
Investment in new ideas
Investment in new insurance strategies may help insurers manage costs in an uncertain environment. Many companies have seen valuations fall in recent months, and many have been forced to reassess their overall spending. This may mean outsourcing some activities to third-party providers. It also means that actuarial teams should collaborate with product design and sales teams in developing new insurance products. Insurers may also look to restructure their in-force business, reducing its complexity and increasing efficiency.
Distribution activity is another area attracting investors. Distribution players are buying multiple independent distribution platforms and mutual insurers to build scale. PE investors are also becoming more creative in their deal-sourcing strategies. They can create new fund structures and co-invest with venture capital or insurers, or take public companies private. These new insurance strategies offer significant upside and will grow over time. This trend is expected to continue for some time. In the meantime, investors should look to expand their portfolio with new strategies.
Tax-efficient life insurance strategy
Those looking for a tax-efficient life insurance strategy will find a whole life insurance policy is an ideal choice. This type of policy offers both permanent coverage and a generous death benefit, but the best part is that the cash value accumulates over time without triggering income taxes. In addition, you can use the cash value to pay for taxes in the future. A permanent life insurance policy can resolve a variety of tax-related issues for pennies on the dollar.
Another tax-efficient life insurance strategy is a LIRP. LIRPs allow the policyholder to purchase as little death benefit as allowed by law, while maximizing the growth of the policy’s cash value. Tax-free growth and loans are possible for the cash value inside the policy. The loan rates are usually low and can be as low as zero percent. This strategy offers tax-efficient benefits for both the policyholder and the insurance company.
Moving up the power curve
The likelihood of moving up the power curve is greater if insurers use a combination of aggressive, disruptive, and innovative strategies. These are actions that are supported by endowment and industry trends. They can also be described as bold and require substantial investment and initiative prioritization. But a company’s odds of moving up the curve increase exponentially as it applies more bold moves. But which moves are best? Read on to discover how you can increase your odds.
A key step in moving up the power curve is to become more efficient at underwriting. Efficiencies in these processes are often improved by privileged customer segments, data analytics. These productivity gains are then reinvested to enhance product margins and enhance the overall business. Carriers that are able to implement three or more of these actions have the best chances of moving up the power curve. But how can insurers make bolder moves?