Leveraging The Latest Trends In Life Insurance

The past year will be remembered for many things, not the least of which is the global pandemic that disrupted life as we knew it. As it persists, but with the vaccines now being distributed, there is reason for optimism. For the life insurance industry, the latest data suggests better days ahead. In its latest research, LIMRA noted that 2020 saw the U.S. life insurance market having contracted three to seven percent compared to 2019. In September 2020, however, LIMRA reported that, in the second quarter of 2020, total individual life insurance new policy sales had increased two percent. LIMRA is now projecting a slow recovery in 2021 and 2022. Cited was LIMRA’s survey result that six in 10 Americans reported having a heightened awareness regarding the need for life insurance stemming from the pandemic. Term life sales, which LIMRA projected to increase as much as seven percent in 2020, is expected to benefit most in 2021. The pandemic, as a driver of developments in the life insurance industry, was not the only one. There were other trends which have introduced new sales and business opportunities for brokers/agents in 2021.

Trends and Developments
The pandemic’s influence
Staying on the pandemic for a moment, in addition to raising awareness of the importance of life insurance, it also brought attention to online sales. With remote working and social distancing in place, many consumers—especially the younger digitally-oriented generations—went online to purchase insurance. The ease in which this can be done with a simple Google Search, coupled with the countless online resources which compare products and costs on single websites, made this option easy. Mobile apps further supported online insurance purchases. Between March and May of 2020, Google Search traffic for “life insurance” products increased 50 percent. It is no surprise that a Deloitte survey found 55 percent of North American insurers are accelerating their digital processes in order to better accommodate the market and remain resilient.

Insurers that empowered their broker/agent networks with online product information and digital solutions have further helped drive more sales. Additionally, many insurers have become more proactive in supporting their sales networks with increased sales management and prospecting support. They have established carrier/broker forums through which brokers can directly convey their market experiences, challenges, and needs. They have launched more aggressive email and social media marketing campaigns. The more relaxed policies some carriers introduced during the pandemic such as eliminating their medical exam requirement also influenced sales. Some of these policies are expected to continue in 2021.

The trusted professional factor
That said, the need to gain advice and reassurance from a real person—an experienced broker/agent—also had many Americans reaching out to an insurance professional in a reversal of roles. Just a decade ago this was not as uncommon, but prior to the pandemic sales were driven predominantly by brokers and agents. This also is a reflection of how life insurance sales have declined over the past ten years with LIMRA reporting that in 2010, 63 percent of Americans had life insurance policies compared to 50 percent in 2020. Today we are now seeing a more focused approach on customer engagement, whether the first call was initiated by a consumer or through a broker’s outreach. In fact, cultivating and nurturing customer engagements has become one of the most significant trends of the past year and projected to have a continued significant role in 2021 and beyond. Despite the influx of digital technologies into the insurance marketplace, consumers are looking for professionals that focus on them, their families and life journeys in the same way that financial planners do. They are starting to expect annual reviews, new product suggestions based on real-time data, and value-added services that demonstrate a broker/agent’s commitment to their specific financial needs. The rewards for this enhanced customer engagement are fewer policy lapses and new up-sell and cross-sell opportunities as consumers are more likely to refer an insurance professional who is more involved with them and serves more like a trusted professional.

Market responsive products
With the spotlight firmly on telemedicine during the pandemic, insurers have harnessed the power of new telehealth solutions. Consumer-friendly, easy-to-use online platforms linking consumers to experienced Registered Nurses and doctors are addressing medical inquiries in a timely manner, while also reducing medical costs associated with unnecessary hospital emergency department, urgent care facility and physician office visits. Other innovative solutions introduced over the past year have included new life stage-oriented products such as new concierge solutions that link baby boomers to community resources, and hybrid products that give them whole life insurance with long term care benefits, as well as policies that can be purchased entirely through digital channels for millennials and Gen-Z buyers.

AI and digital decision making
Over the past year, insurers have embraced advanced technologies such as Artificial Intelligence (AI), machine learning and proprietary algorithms which are giving them new and improved data sources for improved agile decision-making. These range from insights gained from claim reports and patients’ electronic health records to drug databases. By applying this data, insurers are able to streamline their underwriting processes, improve the quality of their risk assessments, be more strategic in their product development, and support a better customer experience. When shared with brokers/agents, this market intelligence is facilitating better sales and marketing strategies that reflect personalized, targeted marketing approaches which help capture greater sales.

Opportunities Ahead with Best Practices
The doom and gloom of the past year might have many thinking 2021 will be an uphill battle. It will not be easy, but there are opportunities for brokers/agents who take advantage of new trends and developments and implement best practices. It is important that they leverage carriers’ websites and mobile apps, participate in their carrier/broker councils and webinars, and apply the market intelligence they share in prospecting. In addition, communicating frequently with customers by sharing customized product information not only positions the broker as a consultative trusted professional, but also for up-sell and cross-sell opportunities. The more personalized the approach, based on an individual’s age, family situation and financial status, the more likely a sale will be captured. Further, recognizing underserved markets and tailoring marketing and sales strategies exclusively for them can help a professional gain traction in a niche that can grow into its own revenue stream. Many insurers still tailor their information to the traditional “head of household”—a male. By being mindful of this and, instead, speaking in a nongender voice, or developing sales strategies that specifically speak to women (single mothers with children, single women, women business owners, etc.), brokers/agents distinguish themselves from many of their competitors. It is also important to recognize our nation’s multicultural demographics and when appropriate provide information in different languages and designed to reflect diversity.

Closing Thoughts
The pandemic may have ushered in a “new normal,” but it also helped the life insurance industry gain greater appreciation for new ways to work, the value in being flexible, and the importance of leveraging technology both to improve their operations and to be a better customer resource. For brokers/agents, this greater clarity too has paved the way for them to evaluate and potentially re-engineer how they have been operating. If it has been a “business as usual” approach, now is the time to consider how the industry has and continues to evolve and implement best practices to garner new opportunities.

John Thornton is executive vice president, Sales and Marketing, at Amalgamated Life Insurance Company, White Plains, NY. In this role, Thornton applies over 30 years of insurance industry experience to lead the sales and marketing functions of Amalgamated Life Insurance and other entities within the Amalgamated family of companies. His effective strategies have led to Amalgamated Life’s steady growth of its voluntary portfolio and related sales. As a member of the senior executive team, he is actively involved in the operations, oversight and direction of the organization.

Thornton can be reached by email at: jthornton@amalgamatedlife.com. Web: www.amalgamatedlife.com.