The life insurance industry has evolved rapidly in recent years, adapting to growing customer needs, emerging technology and market shifts. While technology has revolutionized significant changes to the life insurance sales process, it is important to remember that human relationships remain essential. Despite digital advancements that make it easier for customers to research, compare and purchase insurance products, sales agents still play an important role and account for more than 95% of life insurance sales.1 The adage “insurance is sold, not bought” isn’t dead yet.
Technology is frequently seen as a tool to boost sales efficiency while simultaneously dehumanizing it. However, the opposite can be true—technology sometimes provides a more customized and authentic experience while maintaining efficiency.
By empowering agents with the right tools, resources and support, companies, in theory, can significantly improve their bottom line by enhancing individual productivity and attracting more agents. This article examines three components of effective insurance sales and how the critical role of technology fits into them:
- Attracting customers
- Streamlining the buying process
- Building a strong brand
Top of the Funnel
Many consumers research life insurance online and utilize social media for information and recommendations.2 However, we believe insurance companies should refrain from monopolizing the top-of-the-funnel process with online advertising, as this is largely ineffective and competes against their own distribution. Instead, sales agents should be encouraged to harness the power of social media and online marketing to build their personal brand, engage with potential clients and offer valuable advice. Savvy sales agents often establish a strong online presence that draws in new customers and fosters relationships with current ones by publishing interesting information, providing helpful tips and demonstrating their expertise without appearing overly sales driven. This personal touch, we believe, is more effective when executed by individual agents rather than a corporate team.
Simplified and Streamlined Buying Process
The process of purchasing life insurance has become streamlined and more straightforward with the emergence of digital platforms and applications. Customers can now receive quotes, submit applications and complete the underwriting process online. This can free up sales agents to focus on providing advice and facilitating the process.
Systems enable policies to be tailored to the requirements of the specific consumer. Adding immediate-issue and accelerated underwriting has sped up the acquisition process even more, altering its dynamics and potential. In addition, advisers and systems can respond to unique client wants and preferences by leveraging artificial intelligence (AI). For instance, they can provide personalized products and customize the purchasing process for upsell and cross-sell opportunities.
Finally, the policy can be delivered digitally and immediately placed in the policyholder’s digital wallet.
Branding and Personalization
So that’s the process as it has always been:
- Execute the purchase
But it’s not—there is a disconnect somewhere between authentic sales-focused participation via social media and purchasing an insurance policy under an insurance company brand.
Even if the procedure is delegated to an online system, consumers still choose to purchase from people they feel they can trust, who are like them and hold similar values. Since they want to appeal to a wide range of consumers, insurance company brands are purposefully uninteresting to avoid upsetting anyone. They don’t use a tone that is too direct, friendly or any of several personality traits that would cause them to stray too far from the norm.
For good or bad, we are seeing more and more companies in Canada that look like insurance companies, but in reality, they are distribution brands. For example, companies like Emma, Nowly and Dropdead Life Insurance are distribution brands that are unique in their products and their way of executing the application process. Most customers do not even know the insurance company behind these brands until they read the fine print in the footer or policy document.
Colors and logos are only a small part of branding. Branding also encompasses the company’s beliefs and how its people interact with clients. The strength of letting distributors establish their own brand is that it maintains the qualities that first attracted these customers. Agents can humanize their brand and differentiate themselves from competitors by engaging in their communities and doing charitable work. Insurers shouldn’t expect the sales agent’s personal brand to appeal to everyone. The future of digital distribution will involve ever more precise targeting, not replacing the sales agent but embracing and empowering the sales agent as an individual to showcase their unique personalities, values and expertise.
While technology is enabling insurance companies to transact on a self-serve basis, it also is drastically altering the consumer landscape. Ten years ago, many people believed technology would replace agents by now. However, that is not the case. Instead, technology is used to empower agents and make them more effective.
In today’s rapidly evolving life insurance industry, empowering distribution is essential for achieving success. Technology has significantly transformed the sales process, but it can’t replace the value of interpersonal relationships. Most life insurance sales still come from sales agents who are essential to the process. To increase their productivity and draw in new agents, it is crucial to equip agents with the right tools and resources and empower them to be authentic.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
Copyright © 2023 by the Society of Actuaries, Schaumburg, Illinois.