The next wave of retirees is fast approaching, and they’re digital natives who likely won’t settle for their parents’ paper-based processes. As Generation X moves toward retirement, the life and annuities industry faces an urgent imperative: build the digital infrastructure today that will serve this tech-savvy generation tomorrow. This is particularly crucial given that total annuity sales increased 29% year over year to $114.6 billion in Q3, according to LIMRA.
While the same report shows that these numbers were driven by high interest rates and market volatility, maintaining this momentum with Gen X will require more than just attractive rates – it may demand a complete digital transformation of how annuities are sold and managed. Here is a technology roadmap for every chief technology officer in the industry to help make certain their company remains competitive in the next five years.
The market context
Although annuity sales continued their upward trajectory in 2024, a Zinnia survey conducted in July reveals a critical gap: Only 49% of current annuity holders are satisfied with their online account management tools. For Gen X consumers who manage everything from mortgages to investment portfolios online, this technological gap represents a significant barrier to adoption.
The business imperative
While current market conditions have driven strong sales, maintaining momentum with Gen X requires a fundamental transformation of our technology infrastructure. The same Zinnia survey found that less than half of Gen X adults are confident about their retirement savings lasting beyond their 70s. This creates a massive market opportunity. Integrating L&A products as an integral part of anyone’s wealth portfolio requires meeting customers’ expectations for digital convenience and personalization.
Every technology team in the business should adopt four long-term strategies to help meet these evolving demands.
1. Modernize your infrastructure to support scalable workflows
The foundation of digital transformation begins with modernizing core infrastructure. By moving from monolithic systems to microservices architecture, companies can achieve the agility needed to respond to market demands in real time. This isn’t just about technical efficiency – it’s about business survival.
Modern infrastructure enables rapid product launches, reduces time-to-market for new features, and dramatically improves the customer experience. When carriers can process applications in minutes rather than days, they capture business that would otherwise be lost to more nimble competitors.
Modern infrastructure provides the foundation for innovation, enabling carriers to launch new products and features without risking their core business operations. This agility becomes a competitive advantage in attracting and retaining Gen X customers who expect digital-first experiences.
2. Design for omnichannel distribution
The future of annuity distribution isn’t about choosing between digital and traditional channels – it’s about seamlessly integrating them all. By implementing a unified platform architecture, carriers can meet customers wherever they are, whether that’s through an agent, financial advisor, mobile app, or embedded in a wealth management platform. This flexibility is crucial for Gen X consumers who frequently switch between digital and personal interactions in their financial lives.
The business case for omnichannel distribution is compelling: Carriers who successfully implement omnichannel strategies see an average 15%-20% increase in sales and a 25% reduction in customer acquisition costs. More important, carriers are able to capture business that would otherwise be lost when customers encounter friction switching between channels. This architecture can also future-proof the business, allowing rapid expansion into new distribution channels as they emerge.
3. Invest in data-driven recommendation engines
In the age of Amazon and Netflix, Gen X customers expect personalized experiences in every aspect of their lives, including financial services. Building sophisticated recommendation engines isn’t just about improving customer experience – it’s about increasing conversion rates and customer lifetime value. By leveraging machine learning and advanced analytics, carriers can equip agents and advisors with insights and data to help provide personalized product recommendations that truly resonate with customers’ needs.
The impact on business metrics is substantial: properly implemented recommendation engines can increase conversion rates by 30% and customer lifetime value by 20%. More important, they enable carriers to shift from product-centric to customer-centric business models, creating deeper relationships with customers and increasing retention rates.
Technology enablers
The successful implementation of these strategies relies on several key technologies that will fundamentally reshape how we serve the Gen X market.
– Blockchain and smart contracts. The adoption of blockchain technology represents more than just a technical upgrade – it’s a revolution in how we handle transactions and maintain trust. By implementing private blockchain networks and smart contracts, carriers can automate complex processes while maintaining absolute transparency and security. This transforms labor-intensive operations like claims processing and policy administration into seamless, automated workflows.
The business impact is dramatic: reduced processing costs, eliminated reconciliation needs, and enhanced customer trust through unprecedented transparency. For Gen X customers who value both efficiency and security, blockchain balances innovation and reliability.
– Machine learning and generative AI. Artificial intelligence isn’t just another technology tool – it’s the key to scaling personalized service across millions of customer interactions. By implementing advanced ML models and generative AI in a compliant and regulatorily aligned manner, carriers can provide the kind of personalized, responsive service that Gen X customers expect, but at a scale that was previously impossible.
Natural language processing can enable intelligent document processing and automated customer service, while predictive analytics help identify customer needs before they arise. The result? Reduced operational costs, improved customer satisfaction, and the ability to serve more customers with fewer resources.
– Embedded insurance. The future of insurance distribution lies in seamless integration with the platforms and services that Gen X customers already use. Embedded insurance isn’t just about adding another sales channel – it’s about fundamentally changing how and where customers encounter our products.
By creating embeddable solutions and standardized APIs, carriers can reach customers at the moment of need, whether that’s through a financial planning app, real estate platform, or wealth management service. This approach has shown remarkable results, with embedded solutions achieving conversion rates up to five times higher than traditional channels.
– Cloud infrastructure. Cloud infrastructure isn’t merely about cost savings or scalability – it’s the foundation that makes all other digital initiatives possible. A robust cloud strategy enables rapid innovation, ensures business continuity and provides the flexibility to scale operations up or down based on market demands.
For carriers serving the Gen X market, cloud infrastructure provides the performance, reliability, and security needed to deliver consistent digital experiences across all channels. The business benefits extend beyond technical metrics to include faster time-to-market for new products, reduced operational risk, and improved ability to integrate with partner systems.
The path forward
The transformation of the L&A industry isn’t just about implementing new technologies – it’s about fundamentally reimagining how we serve our customers. The Gen X market represents an unprecedented opportunity, but capturing it requires more than surface-level digital initiatives. It demands a complete rethinking of how we build and deploy technology.
For technology leaders in the L&A industry, the message is clear: the time to act is now. Those who successfully implement these four key strategies won’t just survive the digital transformation – they’ll lead it, capturing a greater share of the Gen X market while building the foundation for future growth. The question isn’t whether to transform, but how quickly we can execute on these essential initiatives to meet the expectations of tomorrow’s retirees.