How a selfie could be the key to unlocking a life insurance policy

The next selfie you take may determine how much you’re going to pay for that life insurance policy.

Lapetus Solutions, a two-year-old startup based in Wilmington, North Carolina, has developed technology to assess a whether a person is aging slower, faster or at par with their chronological age based on a selfie and a series of questions. Beyond the obvious clues to aging, facial lines can also offer clues to other health ailments that can influence how long an individual will live, including whether or not they smoke or body mass index. These insights can help insurers figure out premium costs and radically cut down the time it takes to evaluate life insurance applicants, said the company.

“Today, you answer a 10-page application and a medical exam and it takes several weeks before you get approved,” said Janet Anderson, CMO of Lapetus Solutions. “With our tool, we’re able to provide this insight without any sort of medical exam. We’re able to provide immediate feedback on photographs and based on questions we ask.”

The software became available to insurers this year, and according to the company at least one national insurer is testing the technology. Discussions are ongoing with other providers about possibilities to onboard it. Insurance technology observers, however, say that while providers are keenly watching the evolution of the technology, it will take years to put into practice.

Anderson emphasized that facial analytics alone don’t determine Lapetus’ assessment of life expectancy for insurance underwriting purposes. Individuals are asked a series of questions similar to what an insurer would ask, along with additional information that could include insights into family history and age of menopause. The results of the questions, combined with the facial analytics technology, determines the result, she said. The analysis of the face is based on a selfie that’s uploaded to the company’s software platform.

“It’s certainly very early stage,” said Matthew Josefowicz, CEO of Novarica, a research and consulting firm that focuses on insurance. “It’s a good example of the ways that insurers are thinking about how emerging technology can change the life insurance buying process that is so clearly broken.”

Given the pace of technological advances, the process of applying for life insurance needs disruption, Josefowicz said, as applicants must currently submit to an onerous process of questioning and medical exams that can take weeks or sometimes months, and dissuades many from applying.

That is similar to findings of a McKinsey study released last month, which argued that legacy insurance companies that don’t quickly embrace technological change will find it “increasingly challenging” to generate attractive returns. Facial analytics is one tool insurers are looking at, in addition to data from wearables. But adoption of facial analytics as a viable underwriting tool will depend on tests by regulators and consumers.

“There’s a ways to go before social and regulatory acceptance of that,” Josefowicz said. “Anybody offering the technology needs to prove that it’s predictive and that it’s not discriminatory, and prove to regulators that this is viable — and create some social acceptance around it.”

Others argue that the use of facial analytics for underwriting could drive up premium costs.

“I don’t think it’s looking for things that make you look good,” said Tom Scales, head of Americas for life, annuity and health at Celent. “It could drive up the cost of insurance which could draw the ire of state regulators and customers.”

Given the industry’s risk aversion and other concerns, what may be more realistic is a hybrid model.

“The most likely scenario is that there will be a blend of traditional and new approaches to assessing risk,” said Mark Breading, partner at consulting firm Strategy Meets Action. “If this technology is proven to be reliable and has strong predictive capability, insurers are likely to push for its use, but information regarding medical history and lifestyle will always be important as well.”


How to get millennials to buy life insurance

Insurance, so they say, is the next fintech frontier. And yet, all of the hype about insurtech is forward-looking; as of May 2016, insurance remains gloriously non-technological.

Though internet insurance has, to a certain extent, changed the insurance landscape, human agents still dominate the insurance market. In fact, it would seem that far from shrinking, the industry is acquiring more and more human personnel: from 2004 to 2014, the number of insurance agents, brokers, and service employees in the US ballooned from slightly over 879,000 to 1,007,000.

Has the influx of insurance agents helped boost insurance sales? Not in the life insurance sector, it hasn’t. Bloomberg’s Ben Steverman summarized McKinsey & Co. findings on why life insurance sales are plummeting: “complex and confusing products, paperwork that takes forever to fill out, salespeople who push their wares rather than provide objective information.”

PLummeting life insurance sales
per Bloomberg

For now, then, the insurance industry is stuck in a particularly dull limbo: on the one hand, traditional insurance sales techniques aren’t working, and certainly aren’t drawing in millennials. On the other hand, insurtech, set to revitalize the industry, isn’t quite in place.

So until the insurtech revolution begins, here are 3 steps insurance companies can take to encourage millennials to purchase life insurance today:

Take a page from big banks

As part of their greater move to cut costs and boost efficiency, banks are closing down bank branches like crazy and moving more and more of their services online. In a recent podcast interview, Jamie Dimon revealed that Chase’s online banking platform, Chase Online, has 30 million users as of May 2016.

Insurance companies have everything to gain by following in big bank’s footsteps and gravitating their services online: they’ll reduce costs as well as become more accessible to millennials, who are key drivers as early adopters of digital payments over cash and cards. At the end of the day, millennials are accustomed to simple, intuitive apps that allow them to make business transactions online. If insurance companies fail to take their first digital step by at least partially moving to internet sales, they risk being left behind when some of the new insurtech startups gain traction.

Get on top of your storytelling

As with any brands looking to engage millennials, insurance companies should create arresting content across social media platforms. In particular, life insurance companies should be – but aren’t – utilizing media platforms like YouTube as well as more nascent video platforms such as Instagram and now Snapchat to convince millennials that life insurance isn’t a luxury, it’s a necessity.

Trov, an on-demand insurance platform for single items, has shown that the insurance industry can create short, beautiful video ads that demonstrate why you need home owners insurance. Of course, Trov has the advantage of being an app that’s incredibly simple to use, making its argument all the more compelling: insuring your possessions is important, relatively cheap, and can be done with a single swipe – why wouldn’t you insure?

However, even without the seamless mobile app and the low price tags Trov has to offer, life insurance companies can generate moving video content about the impact of life insurance on families and friends. A video depicting the loss of human life and its financial consequences has at least as much potential to engage millennials and go viral as a video depicting the loss of a guitar, no matter how beloved.

Build/join communities

Ben Steverman is right – life insurance is a major “life-and-death financial decision that no one wants to think about.” Nevertheless, if life insurance providers succeed in creating powerful narratives about loss and its financial wake, their online platforms have the potential to become a safe space for millennials to share their grief and learn about end-of-life financial decisions.

One company that was able to grow their exposure and the trustworthiness of their brand through community facilitation is American Express. The company’s OPEN Forum provides advice, content, and resources to small businesses, and also serves as a platform on which small business owners can share their stories. With 400,000 Facebook likes and 202,000 Twitter followers, Open Forum proves that growing a committed online community around financial topics is doable and very worthwhile.

However, even insurance companies that don’t have the resources to set up their own online greenhouse for communities can get in on the action by joining existing digital conversations on death and dying. Reddit, for example, has a thread called Death: Let’s Talk About It. If life insurance companies enter this type of community respectfully and offer concrete financial advice to people who are dealing with death and grief, these companies have the potential to gain grateful, loyal clients.

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