Solving the Life Insurance Distribution Problem
This is the first in a three-part series about how Breathe Life is helping to solve the life insurance distribution problem.
You’ve likely heard me say this before, but the life insurance industry has a problem. The distribution system was built on a model of having agents scattered around the country going door to door and drowning under the massive amounts of paperwork involved in policy applications and underwriting. This industry has been slower to keep up with the digital revolution.
As has been seen with other industries, falling behind digitally has a big cost and is hard to recover from. In the U.S., the average age of a life insurance agent is 59 and one-fourth of the workforce is expected to retire in 2018, and the network doesn’t have succession plans in place. According to one survey, the industry is perceived as old and boring by younger graduates. This creates a recruitment problem, which in turn leads to a sales problem as companies need agents to be on the ground and selling their products.
As well, the middle market has been largely ignored. The perception is that it’s a money-losing market segment, so the focus has been on higher net worth consumers leaving an estimated 56% of middle market households in the U.S. without life insurance. If insurers could cut acquisition costs, they could reach this untapped market and increase revenues.
The life insurance industry wants to embrace technological changes, but it can be hard to actually put words into actions. Life insurance companies aren’t tech companies, they often don’t have enough in-house support, and if they do, they might not know how to create user-friendly online application platforms, analyze the data that applications provide them, or market themselves digitally.
That’s why partnering with an InsurTech like Breathe Life makes sense.
The Breathe Life online platform has several benefits and values, which I will examine in my next content series. Overall, the platform helps insurers find and attract new customers online, helps those customers learn about insurance products, helps call center agents provide a seamless omnichannel experience and helps advisors manage the application process — from lead to policy sold. Instead of spending millions of dollars to create a proprietary platform, companies can get up and running in a matter of months. Companies can now reach their target audience more efficiently and in less time.
Using the Breathe Life platform, one company expanded its digital advertising from one to four mediums. They were also able to increase revenue and reduce acquisition costs by selling directly online and refocusing the time of their call center agents. And the company still sold $103k in first-year premiums in just nine months!
In their 2016 report on the state of the life insurance industry in Canada, Ernst and Young listed technology innovation as a top driver of market shifts. They pointed out that sales to younger consumers have been steadily declining and that social media and technology will be key in reaching this market in the future.
Over the next few weeks, I’ll be examining the different ways that you can modernize your distribution to reach more customers, faster and still maintain the face-to-face contact that advisors have built their businesses on.
