A Google Trends analysis shows a steady rise in searches for life insurance over the last five years. This trend peaked between January and early March 2020, coinciding with the beginning of the COVID-19 outbreak. Since March, search activity has returned to pre-pandemic levels. However, the data illustrates that today’s policyholders are increasingly capable of making decisions about the purchase of life and health insurance by themselves.
Within the uncertainty coronavirus has created and as the perception of life insurance value increases – it makes strategic sense for firms to prioritize their omnichannel presence. The life insurance industry has long held the axiom – insurance is sold, not bought – but the current environment could change that.
We see more and more individuals preferring to personally research policy types and brands to make purchase decisions independently of agent advice, although policyholders continue to find traditional agent/broker channels valuable as well. Still, the rise in digital adoption across customer segments is a wake-up call to carriers to offer the best possible digital distribution experience.
While an Everest study showed that 90% of insurers have implemented some digital customer acquisition capabilities, only 30% say they can scale and keep pace with growing demand.
Across generations, more L&H policyholders are transacting online or via mobile app
Furthermore, the competitive landscape is evolving to give policyholders a broad range of life insurance choices. Life and health policyholders interviewed as part of Capgemini’s World Insurance Report 2020 said they were willing to purchase insurance from non-traditional firms, such as BigTechs (31%) and product manufacturers (24%). As new entrants can offer a better customer, onboarding or service insurance experience, as stated in an April 2020 Celent study, traditional insurers are considering approaches to revamp both their operational front end (56%) and back end (43%) to support experience-led engagement.
The current public health emergency has proven that for all businesses, agility is essential, and fast change should be anticipated and expected. Optimizing their connected digital distribution channels is critical as many agencies reduce brick and mortar operations, previously the bulk of life insurance distribution.
An array of personalized products can now be selected by consumers in multiple channels and is proving popular with policyholders. In fact, a recent Forrester study indicates that more than 90% of new life insurance sales are expected to have a digital interaction by 2020. All signs are clear that customers are demanding a complete digital experience.
Policyholders seek a straightforward digital buying experience – even for complex insurance products – with a majority saying they prefer self-service together with advice from agents or sales staff.
Today’s life and health insurance customers back their own research
This growing trend toward experience-led, multi-channel engagement is spurring life insurers to put their best digital foot forward.
Today’s inventive insurers are:
- Customizing products to ensure a highly personalized policyholder experience
- Augmenting connected digital distribution with the convenience and familiarity of traditional channels
- Studying insights from customer data to simplify and trigger the insurance purchase journey, especially at critical customer life touchpoints (i.e., marriage, a new child or home).
Investment in digital acquisition capabilities bolsters a holistic online experience for customers. In the Celent report, it was uncovered that nearly half of North American life insurers are investing in direct-to-customer portals, connected e-applications, and data-enriched CRM to modernize their distribution channels and target digitally savvy customers. Moreover, firms are migrating existing processes to digital platforms that enable more incisive analysis, validation tools, and real-time status updates.
Data analytics and artificial intelligence are revolutionizing the digital value chain for life insurance. From accelerated underwriting to straight-through processing (STP), I observe data being at the core of today’s acquisition strategy. Leveraging them to create a tailored customer experience pays off for insurers by boosting shopper propensity to buy a policy.
Many insurance companies are also engaging with a larger ecosystem. At least 10% of life insurers are exploring partnerships with InsurTechs to fill efficiency gaps in their digital value chain, according to a recent report. Collaboration with these highly agile, innovative firms enables carriers to quickly implement automated processing, virtual advisors, and better risk analytics.
Throughout the past three to five years, I have seen many firms scrutinizing their digital acquisition strategy. COVID-19 has accelerated digital urgency, clearly, and customer acquisition will never be the same now that convenient, fast, hyper-personalized solutions rule the new normal. As Steve Jobs once said, “You’ve got to start with the customer experience and work back toward the technology – not the other way around.”
To continue this conversation, connect with me on social media.