The life insurance and annuity (L&A) industry can create significantly more value for both shareholders and consumers, but only if it can motivate millions of people to understand and fully embrace these products and their potential benefits. The industry is evolving, and insurers will need to navigate a sea of change including demographic shifts, technological innovation, resource challenges and regulatory demands to engage with these new consumers, and deliver a personalised experience tailored for their specific needs.

Organisations that encourage the integration of technology and tailored messaging will leave behind an industry that traditionally has been relatively slow-moving in adopting innovation. And non-traditional entrants, flush with talent and unburdened by lethargic legacy systems and old-school mindsets, have an opportunity for their voice to be heard on the right channels at the right time, to better serve customer needs while remaining relevant and competitive. So, what does the future of the life and annuity landscape look like?

In this latest report, we spoke with over more than 425 industry decision-makers to discuss the key signals of change across the industry, from recruiting and underwriting to distribution and claims-handling. We detail how leaders in the life insurance and annuity space can better serve customers and gain lasting competitive advantages, by knowing where they can play and how they can win, and describe four business models likely to characterise the industry in the years ahead.

Signals of change

Consumers’ interest in life and annuity products rose during the pandemic, but signals of change across the industry are starting to show the need for fresh approaches to seize new opportunities.

Consumer expectations:

Consumers looking for life policies and annuities online expect a personalised experience and increasingly compare this to other online shopping purchases. The “old-school” advisor-led sales model will likely feel increasingly alien to people entering the marketplace for the first time, but human interaction and empathy at the right moments remains essential, meaning the advisor model should evolve.

Innovative products and services:

Leading insurers are developing one-stop-shops for end-to-end protection and services that fit the needs of customers at every stage of life, retaining them as customers for decades. These players will likely look to feature new actuarial and pricing assumptions, accounting standards, and channel selling strategies for market opportunities across new areas of focus as the industry evolves.

Competition is becoming intense:

As consumer preferences and shopping behaviours evolve, new partnerships and evolving technology may disrupt distribution channels. Large non-insurance digital marketplaces are entering the market, and purchases of life insurance products are becoming embedded within the wider purchase ecosystem.

Regulatory changes:

Regulators are likely to respond to the demands of investors, including some of the largest institutional and mutual funds, that insurers report more fully and uniformly on their ESG standards. Regulators may also see longer life expectancies as new opportunities to impose requirements that meet societal needs.

Tech-enabled strategic objectives:

Leading insurers are investing in emerging digital technologies to achieve strategic business objectives. These organisations can begin to generate value as they modernise their data architecture with the ability to integrate real-time data from multiple sources to accelerate a shift towards fully automated continuous underwriting and a new wave of personalised offerings.

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Future of insurance: Life and annuities

Discover the latest insights and trends that are shaping life and annuities landscape

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Future business models:

Keeping pace with consumers’ needs or the advances of leading competitors will be fundamental. Leading insurers will likely look to review and transform business models and organisational cultures to improve processes, product development and portfolio management in different ways. In the years ahead, we expect business models to fall into four main categories:


Embedded solutions

Organisations that develop new partnerships across the wealth, health, and some non-traditional sectors to meet an integrated set of end-to-end customer needs. These use a wider array of channels and marketplaces for flexible, fast, convenient service, especially to new entrants and less affluent consumers.


Effective education and clearer value propositions

The key to connecting with today’s buyers is simplicity. Those who successfully embed simplicity in product design, educational materials and marketing DNA will consequently drive those same principles across the front and back-office processes, creating nimble and dynamic organisations who can respond rapidly to change.


Continuous product development

Organisations that will speed through product innovation and improve pricing flexibility with high-quality data and powerful data architectures, leading to high-end, autonomous experiences.


M&A and capital management

Driving more efficient and effective service lines, these players will look to review and remove capital-intensive and non-core, suboptimal lines of business, redeploying capital in more sustainable, higher-growth core business segments. These organisations intend to acquire asset managers and asset management capabilities in varied asset classes to supplement in-house capabilities in driving scale and asset class diversification.

Connected Enterprise

Digital transformation across the life insurance and annuities market requires adapting to a connected operating model. Our connected enterprise approach is designed to help life insurers and annuity providers assess their existing capabilities, identify capability gaps, and manage the transformation hurdles across the enterprise to design and embrace their future business models.

Eight capabilities, twice as likely to succeed

The eight capabilities of the KPMG Connected Enterprise deliver tools, methods and frameworks to achieve a new, better business-as-usual with agility and accelerated innovation.

These capabilities help organizations define a customer-centric approach to digital transformation that connects the front, middle and back offices, and crucial when navigating challenges and opportunities that surround the future of life insurance and annuities.

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Our approach

Our approach is centered on improving all eight connected capabilities across the enterprise to the level that provides the greatest value. These connected capabilities map to the operating model of an insurer and are designed to allow you to prioritise, shape and execute your digital transformation.

KPMG firms help insurers to evaluate their maturity across these connected capabilities, and to then shape their transformation agenda and plans, and deploy improvements in the capabilities across the enterprise with the aim of providing the greatest value.

With the consumer at the core, there are five critical questions that life insurers and annuity providers should ask themselves:

  1. Are you engaging consumers and brokers with compelling value propositions, opportunities, and interactions?

  2. Are you connecting and empowering your employees to deliver on the client promise?

  3. Are you connecting your front, middle and back offices to execute the client growth agenda?

  4. Are you connecting your ecosystem of business partners to jointly deliver on commitments to clients?

  5. Are you connecting to market dynamics and digital signals?

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