Earlier this month the 10th annual ReFocus Conference, co-sponsored by the ACLI and the Society of Actuaries, was held in Las Vegas. ReFocus has become a “Must” Go-To destination for leaders in the life insurance and reinsurance market in North America and beyond. Our team was also invited to speak at the conference and share insight (see here for a sneak peek of our presentation highlights!). This year, more than 600 participants from around the world attended. As always, there was a variety of topics to peak the interests of attendees. But an overriding theme was the need for change in the life insurance industry to be able to better serve its customers of today and tomorrow.
There are some harsh realities in the life insurance world, some of which have always existed, while others are only now becoming prevalent.
Life insurance has always been a product that is “sold, not bought”.
Throughout its history as a “consumer product”, it has always been a challenge to convey the importance of life insurance protection since few really want to talk about their own death or the death of their spouse. It is also difficult to convince people to pay for something today (and each year for many years to come) when they, personally, won’t actually see the benefit when it comes due.
Our society has also changed over the years to one where immediate gratification is pervasive—look at credit card debt, savings rates, spending patterns, etc. Decades ago, having a 1200 square foot house with 3 bedrooms and 2 bathrooms housed most families. Now, in spite of family sizes shrinking, we all need double or triple that space to house ourselves and all our stuff. Conservative financial planning—such as adequate savings for retirement and buying life insurance—has been thrown off by the need to have more now…right now. Finally, today’s target life insurance purchaser (young professionals, married couples, and new homeowners), operates in a world dominated by iPhones, Amazon, and 24/7 convenience.
As we heard from experts at ReFocus, life insurance customers of today and tomorrow want to buy products (all products) in their own way, on their own time. They are also not interested in the seemingly daunting and invasive process of obtaining life insurance. It involves someone coming into their home to collect bodily fluids so that some unnamed “underwriter” can make a thorough risk-assessment, qualifying them to be in the elite club of standard risks. By the way, did I mention that the application process still takes 1-2 months (sometimes a lot longer) just like it did decades ago? The challenge for the life insurance industry is to adapt to the buying habits of today’s consumer while still providing the appropriate needs analysis and risk management that will always be value-added components of the process.
Below are a few thoughts that I hope will spur some additional conversation about how to reach (and serve) today’s life insurance customer:
- We’ve tried the complex, how about trying the simple? Make products that are simpler to understand, with straight-forward benefits. You pay this and you get that. You shouldn’t need an MBA to understand what you are buying.
CLICK HERE TO LEARN MORE ABOUT SIMPLE SOLUTIONS FOR THE LIFE INSURANCE INDUSTRY.
- With all the data in the world today, do we really need blood and urine? How about a very short, easy-to-understand application, a credit report, a motor vehicle report, and a zip code. Most people, based on a simple product, should be able to be approved at standard rates in almost no time.
- Provide consumers with enough information on-line to be able to understand products better before they meet with an advisor. Then, make sure the process to get the insurance is as easy as buying a product on Amazon. (Read: be user friendly—really user friendly).
- Will long-established, large life insurance companies be able to move quickly enough from now to capture today’s consumer? Or, will non-traditional entrants capitalize on what has historically been a very slow-moving industry? (I buy everything else from “Amazon”, can’t I just “google” the words “life insurance” on their site and just click “Add to Cart”, then “Checkout Now”?)