With millions of infections and hundreds-of-thousands of American lives lost from COVID-19, vast numbers of people are paying greater attention to the thought of their own mortality and what would happen to their loved ones if they should pass away. While the increased awareness is hopefully spurring people to protect themselves and one another by isolating and wearing masks, it’s also leading Americans to investigate and purchase life and retirement products in surging numbers.
The pandemic has forced life insurance organizations to take a good, hard look at their digital capabilities. COVID-19 dramatically increased consumer demand for life and retirement products. In fact, according to
If you look from a pure market perspective, many more people started to face the realities and began thinking about both their mortality and long term income needs. According to Jennifer Fitzgerald, Policygenius CEO, in a
Consumer awareness of the need for these products has been elevated, resulting in an increased need for them to purchase these products. According to
Online insurance marketplace AccuQuote has seen life policy sales grow about 30 percent due to the pandemic. The firm’s founder and CEO, Byron Udell,
At SE2, we’ve seen a tremendous increase in new business application volumes and overall premium dollars across our clients. Our highest-volume months ever were May through August. Insurers, in some cases, have oversold and exceeded their goals and target premiums for the year, particularly for annuities.
The need for social distancing and limiting in-person interactions has made it essential for insurers to have digital interaction and sales process capabilities. But unfortunately, many insurance companies didn’t have a way to meet the increasing demand coupled with the need to sell policies remotely, and they missed out on that opportunity. As a result, many carriers have reported slower revenue numbers and others have announced employee layoffs. Digitallycapable insurance companies, however, are selling more policies and gaining market share.
Having the right capabilities is key
The pandemic has made it essential for large legacy insurers to come up with a solid strategy around platform modernization, platform simplification, simplification of their business architecture and being able to engage with consumers on their preferred channels. These must include an array of options, including potentially a direct model, and their existing distribution model, which can be through their captive or independent distributors or insurance marketing organizations (IMOs). All these distribution models are both valid and necessary. But insurers can’t ignore the direct model any longer. Direct is not always a replacement for other distribution channels but can be an extension with its own operating models and products. Investment into the direct model is an investment into future generations. The direct model isn’t completely hands-off but includes capabilities for when customers might require digital or even human guidance or advice. There are times when consumers still may need to talk to someone. Even if they’ve done 80 percent of the research, they still might need a human to help them cross the mental or technology barriers or to understand some of the complex product features. Offering human interaction is a must.
Insurers need to approach the problem back to front and front to back. On the front-end, they need more digital capabilities, and they must have better engagement tools and capabilities so they can not only reach out to customers but also stay in touch regularly. On the back-end, they need better digitally-enabled core platforms and a robust back-end ecosystem. This ecosystem may include many partners that also take advantage of all the innovation happening in the marketplace with the opportunity to leverage industry data, APIs and micro-services within their architecture to integrate capabilities to enable new experiences and new products as the needs of customers continue to evolve.
Life carriers need to reposition themselves to take advantage of the opportunities the pandemic presents. When the pandemic hit, some organizations that ran large call centers and didn’t have remote call center capabilities found themselves in a bad position, particularly those that operate near larger cities, and especially on the coastal cities. If an organization without these remote call center capabilities operated in New York or New Jersey, for instance, it was not operational or productive for the customer when they needed them the most. And if the carrier lacked remote technology capabilities so reps could work from anywhere, it was severely limited.
Many companies run large mailrooms and print shops because the industry still uses paper-based communications. These organizations had to work through enormous logistical and safety challenges when the shelter-in-place directives took effect. In today’s day and age, eDelivery and digital applications are real. Having the ability to digitally accept an application or issue a policy in real-time and being able to eDeliver a policy as well as deliver correspondence and create self-service for consumers, and in some cases, for the distributor as well, since they’re also working from home and do want self-service capabilities as well.
Companies that were prepared with either leveraging technology partners with those capabilities or investing in those technologies themselves have been not only able to meet the pandemic’s challenges, but are equipping them to grow their business in many ways, even beyond the pandemic.
