Whether you’re in the wholesale or retail side of insurance distribution, at some point in the process you’re selling to and working with fellow consumers. And we, as consumers, have become very digital —which means we in insurance distribution need to be very digital too.
The Digital Consumer
Let’s take a quick look at some stats from We Are Social and Hootsuite’s Digital in 2019 report. Of the 328 million people in the U.S., approximately:
- 95 percent use the Internet.
- 70 percent use social media—155 percent of the global average; 87 percent from mobile devices.
- 347 million mobile phone connections exist—more than one per person!
What’s really interesting is that the evolution of our mobile phones into smart devices is rapidly changing the way we do things. In 2009, which seems like just yesterday, less than one percent of web pages were viewed from a phone. As of last year, 52 percent of all web pages were viewed from mobile phones!
This meteoric rise of mobile has significant implications for other devices and our businesses. Just 43 percent of web pages were viewed from traditional computers and laptops; four percent from tablets; and less than one percent from other connected devices. The takeaway for all of us in insurance distribution is that the information we send and the tools that we offer or develop need to work from mobile phones…first.
All of our mobile devices make it easier than ever to stay connected. The average American spends six and a half hours per day using the internet via their device of choice—many of which are connected 24/7 and tracking what we do. This near continuous connectivity is called the “Internet of Things.” In 2019, Statista.com reported that we have nearly 27 billion connected devices in the world and projects that we’ll have 75 billion by 2025.
What’s scary is that whether it’s your phone, Fitbit, Nest thermostat, key card at the office, or late model car, these connected devices are collecting shareable data at a ferocious pace. It’s estimated that 90 percent of worldwide data has been collected in the last two years! And, despite these overwhelming amounts of “big data,” we as consumers expect the companies we work with to keep it all straight across every channel: Web, mobile app, call center…everything in sync…any time of day…to deliver us consistent omni-channel experiences.
Digital Buying Behavior
So, how do rapidly evolving digital consumers and the increasing availability of big data impact insurance distribution and what we sell?
For starters, 87 percent of consumers research life insurance online before buying it, according to LIMRA. However, only 29 percent want to purchase entirely online, which means that 71 percent of people still want to talk to an agent or advisor before making their purchase.
As for the life insurance companies that manufacture products, more than 20 brokerage carriers are in the market with big data powered accelerated underwriting programs. These offerings are streamlined processes for traditional products that leverage big data to eliminate the physical collection of health verification evidence such as medical records and fluids. For qualifying applicants, the life insurance buying experience is simple and weeks faster than traditional methods.
Although this is good progress, our industry still has a long way to go as most life insurance transactions still take weeks versus minutes or days to process. Many incumbent firms have great visions for the future but unfortunately, as we in the industry know, execution has been painfully slow due to very real legacy business challenges.
One way life insurance industry incumbents are accelerating innovation is by partnering with and making investments in insurance technology (aka “insuretech”) start-ups. According to CB Insights, in the first three quarters of 2018, global insuretech investment from various sources totaled $2.56 billion across 204 deals. At over $12.5 million per deal, this incredible amount of capital available to entrepreneurs provides real opportunities to drive change in the insurance industry. This influx of capital combined with progressively digital consumers, rapidly evolving sources of big data, and the life insurance industry’s slow pace of change creates a near perfect storm for innovation.
Our industry is seeing innovation impact nearly every point in the traditional value chain, but at least three insuretech-enabled platform types will be transforming life insurance selling this year and beyond in fast, smart, and endless ways:
- Instant Decision
- Inforce Management
A key attribute of these new platforms is that they are using Application Programming Interfaces (APIs) to make it easy for other industry participants to plug and play with their modern capabilities.Instant Decision Term Platforms can offer up to $1 million or more of coverage at competitive rates and create great buying experiences for qualified consumers. At their core, these platforms are typically accelerated underwriting programs, as mentioned above, with digital interfaces that collect application information directly from consumers and hit big data sources in real time to render immediate decisions for term life insurance.
So far, most of these solutions have taken the form of highly digital agencies writing on a single carrier’s paper: Haven (Mass Mutual), Ladder (Fidelity Security Life), Bestow (North American), Ethos (Assurity), and Fabric (Vantis). A few instant decision platforms like Lumico, however, are fully functioning “A” rated carriers. All solutions enable some form of offline support and aspire to provide it in an omni-channel way so that consumers don’t have to repeat themselves when they cross channels.
Despite some early struggles with acceptance rates, these firms represent the wave of the future that is coming soon. Combine these insuretechs with the increasing number of accelerated underwriting programs available from traditional carriers that merely lack digital interfaces for consumers to apply, and the term life insurance market is well-poised to become very consumer friendly over the next few years.
Robo-Advice Platforms provide interactive needs analysis tools and education for advisors and/or consumers. Either directly or through partners, many of these platforms are establishing the ability to provide product recommendations and digital transaction options at point of advice. Companies like MoneyGuidePro (the popular financial planning software), PolicyGenius (a next gen multi-line digital agency), and Tomorrow (a special purpose planning site for wills), are leading the way.
In-force Management Platforms are re-defining the post-sale relationship with life insurance clients by offering a collection of tools for advisors to proactively manage in-force business and digitally engage with clients throughout their lives. Whether it’s providing in-force values of policies, notifications of lapses or expirations (e.g. Proformex), cross-sell product suggestions at critical life events (e.g. Atitdot), consumer tools to manage legacies (e.g. LegacyShield), or continuous consumer engagement programs (e.g. Sureify), insuretechs are rapidly expanding the life insurance sales process from the tradition of single transactions to a lifetime of sales opportunities.
Today’s life insurance consumers are demanding both modern digital experiences and the ability to get advice from professionals when they want it. Successful insurance distributors of the future will combine traditional customer service models with emerging insuretech solutions to create well-integrated ecosystems that deliver faster and smarter solutions as well as consistent experiences at every touchpoint…and ultimately protect more families in a modern way.