How to sell insurance after COVID-19

Editor's note: This article was co-authored by Nick Frank, head of the US insurance practice at Simon-Kucher & Partners.

MetLife noted in its third-quarter earnings call that lockdowns and social distancing restrictions hurt its sales. In a recent Simon-Kucher & Partners global sales study, more than 40% of retail banking and financial services executives at banks said sales of personal insurance decreased due to the pandemic.

The coronavirus pandemic and lockdowns have negatively impacted insurance sales. The crisis has also amplified and accelerated shifts in customer behavior to digital and online channels. This shift in behavior threatens the traditional face-to-face distribution structure in insurance defined by closeness and physical proximity to the customer.

Personal interactions are critically important in insurance selling. People are not naturally motivated to buy insurance. It is a common saying that insurance is sold, not bought. According to the J.D. Power 2020 U.S. Life Insurance New Business Study, consumers avoided purchasing life insurance because they thought it was unnecessary, too expensive, or too complicated to buy. In a survey of more than 2,400 people, Prudential discovered that people are prone to it-won't-happen-to-me thinking, which causes them to avoid doing things that are ultimately good for them like saving for the future or buying insurance.

Insurance organizations must plan a thoughtful response to the short term and long term disruptive forces unleashed by the Covid-19 crisis. Insurers must invest in tools that improve remote relationship-and-advisory-based approaches to distribution and sales. The role of the insurance intermediary, broker, or agent must remain in focus. Insurers must enable advisors to improve the quality of advice through the use of digital technologies.

Remapping the Customer Journey
During the pandemic, consumers embraced digital channels in record numbers for everything from shopping to doctor consultations. In quick order, they came to appreciate these new seamless, multichannel experiences.

Insurers must build seamless, omnichannel sales experiences for the modern consumer who increasingly wants to engage with them across multiple modes including video meetings, tablet, phone and collaboration tools. Insurers must address all touchpoints, including fact-finding, financial needs analysis, product recommendation and configuration across all channels. The customer journey has shifted and requires the interplay of modes and channels.

Carriers who succeed will have found ways to harness their customer-interactions and data to optimize product pricing and features to address customer need. Insurers will have to be resourceful and adaptive. They will have to build personalized, segment-specific paths, remap touchpoints and identify new instruments to optimize cross-selling, up-selling, engagement and purchasing, for a changing landscape.

For example, personal interactions are critical for complex and higher-value sales. On the digital channel, insurers will have to leverage virtual meetings, screen-sharing, interactivity, and multi-media digital tools to ensure personal interactions conducted remotely can still translate to powerful, compelling experiences for the customer.

Strengthen Ecosystem Connections

Insurers must also redefine how they collaborate, compensate, and manage external partners as part of their omnichannel transformation efforts. The current siloed approach leaves sales teams without data sets that will help identify leads and opportunities. Succesful carriers will address and remove these barriers created by siloed data.

Insurers must connect various field platforms and leverage data technologies to support a systematic and comprehensive sales monitoring process, lead generating, and lead management across channels. Continuous data analysis to identify gaps and evaluate touchpoints can support real-time adjustments and improvements to ensure agents are always receiving high-quality leads and reaching penetration and upselling targets through active outreach.

Beyond systematic development and management of leads, the sales ecosystem must have the right training, incentives, targets, and rewards.

Personalization and Product Development
A concerted effort in data collection and management is necessary as insurers transition to omnichannel selling.

Rich data on customer interactions can unlock more than 500,000 reliable data sets and 20 million data points. Data insights can enable more robust needs-based sales advisory tools to support agents and customers in product identification and configuration. Customers are increasingly expecting well-informed, tailored interactions. They want to see relevant products that fit their financial circumstances.

Data insights can also provide strategic insights into optimizing product portfolios for digital platforms. As insurers shift to new channels, there must be clear differentiation to set themselves apart from competitors. More attention must be paid to offer design and offer structure such that product features and pricing aligns with customers' value perceptions and willingness-to-pay.

Supported by the right tools and approach, insurers can build a modern, resilient digital sales process that can react and respond in real-time across multiple channels while offering intuitive customer care and recognizing the balance of human touch and digital elements.

Dirk Schmidt-Gallas is the global head of insurance and Nick Frank heads the US insurance practice at pricing, marketing and sales consultancy Simon-Kucher & Partners.