Life insurers are exploring ways to streamline and update the traditional policy purchasing process, which can often be slow and time consuming for customers.
Most insurers today are looking to improve the customer experience across all stages of the policy quoting, application, and purchasing journey through the innovative use of technology.
A leading reason that customers in the US say they don’t own a life insurance policy is a perceived lack of affordability, according to LIMRA’s 2016 US Ownership Study. Concern over rates was also validated by a study from Life Happens and LIMRA in which respondents’ median policy cost estimate was more than three times the actual cost.
Simplified, customized purchase journey for customers
If carriers can’t overcome the misperception of high prices, potential customers will never even start the purchasing process. During the initial policyholder purchasing stage, Awareness, carriers can educate potential customers about the benefits of life insurance, what it covers, and what it costs. Gamification offers a fun and engaging route for customer education and awareness, and can help offset the pricing assumptions that consumers have. Some carriers offer products based on life-stage events such as marriage or the birth of a child to ensure that customers understand potential coverage gaps in their existing policy in light of their new protection needs.
Increasingly, insurers are tracking life events for customers and even prospects that participate in voluntary programs using these gamification platforms, often using wearable devices, social media, or other tools to learn about life events from the prospect or customer on an opt-in basis. In return, the prospect or customer may get policy discounts, rewards, a community to get engaged with, or other incentives.
Maximizing customer engagement enriches lifetime customer value and can help carriers promote brand recognition, which is critical in the next stage of the customer journey, Consideration.
Policyholder purchasing journey and moments of truth versus firm business goals
It is essential for insurers to share compelling product information to aid customer decision making while a purchase is under consideration. Some use robo-advisors to revitalize the sales process and deliver personalized customer recommendations. A handful use smart video tools (e.g., Sunday Sky) to provide interactive education videos.Source: Capgemini Financial Services Analysis, 2018
Clark, a German InsurTech startup, offers robo-advisory services via mobile/web apps that analyze policy gaps and advise customers on how to improve coverage. The Clark iOS, Android, and web apps let individuals manage and purchase the full gamut of life, health, and property insurance.
Insurers are also making the policy purchasing process more intuitive and straightforward. Specifically, life carriers are focusing on simplified quote generation for sales speed and efficiency. Faster processes keep customers interested as they transition from the Consideration to the Decision stage.
For example, Legal & General America launched an automated quote-generation tool, SelfieQuote, in early 2018. The tool, based on facial analytics technology, provides a near-instant life insurance quote by estimating the prospect’s age, gender, and body mass index.
Insurers also are streamlining the underwriting process and making it faster by using technology as well as data from third parties. For instance, North American Company for Life and Health Insurance (a Sammons company) introduced an accelerated underwriting process in 2018 that can eliminate the medical exam requirement by leveraging publicly-available data and a short telephone interview. Individuals have the potential to qualify based on certain objective parameters and a decision is generally made on the application within 48 to 72 hours. Processes with quick turnaround times help minimize lost business by keeping not-taken rates in check.
Some insurers are leveraging digital channels to make the Policy Purchase stage more customer-centric. Future Generali India Life Insurance delivers policy documents instantly and directly to customers via WhatsApp to enhance convenience and accessibility.
Customer mindshare optimizes the acquisition funnel
Grabbing prospects’ attention and retaining it through to the sale is more important than ever in today’s digital age populated by individuals who demand speed and convenience.
Digital enhancements in the purchase journey allow carriers to offer greater convenience and an improved experience to prospects, which not only enhances credibility but also improves the likelihood of a happy customer. Greater customer mindshare will help carriers optimize the customer acquisition funnel by reducing leakage and improving sales conversion rates.
To learn more about how insurers are making policy buying easier, please feel free to get in touch with me on social media.