The connected economy will reshape the role of the intermediary in verticals, and life insurance is no exception.
TransUnion noted in a research report that about 4 in 10 consumers go online or use an app when shopping for life insurance. That’s a marked change away from the traditional channels of emailing and calling agents to get quotes, and scheduling medical tests with providers to get underwriting authorization.
The entirely new opportunity for insurers to use digital means (including platforms) to engage with customers is significant, given that the TransUnion report estimates that more than a third of consumers do not have life insurance. The Insurance Information Institute has estimated that life insurance premiums were a $159 billion business in 2021.
Do more online, every day
The stage is set for the continued shift towards doing more online, to break down the pillars between transactional and non-transactional activities. As PYMNTS data found last month in the latest edition of the “How the World Does Digital” report, 65% of all consumers in the 11 countries we studied engaged in one or more of the 37 digital activities we tracked at least once a day: an increase of 0.9% from the second quarter. And 73% did it at least weekly.
Dig a little deeper, and within healthcare, we’re seeing a move toward the use of unified digital platforms that provide consumers with detailed information about their health insurance benefits, allow them to manage interactions with providers and health insurers, and offer better control of your real transactions. with providers.
As found by PYMNTS and Lynx in joint research, 90% of people want a one stop shop, so to speak, to manage everything. That desire, of course, would extend to life insurance, where the model has traditionally been high-touch, as described above, but which, by leveraging data and personalization, can be significantly simplified.
D2C Life Insurance Models
In one example, Haven Life, which operates as a direct-to-consumer (D2C) digital life insurance agency backed and wholly owned by Massachusetts Mutual Life Insurance, uses algorithms and artificial intelligence (AI) to estimate risk, help underwrite policies and, ultimately, extend offers to applicants (and, depending on the policy, without medical exams). Elsewhere, Ladder, which is partnered with Allianz, uses AI to deliver instant decisions and fully underwritten term policies online.
For consumers, there is the advantage of using the online platform models that have increasingly become a staple of daily life during the pandemic. They hope to have a minimum of friction in the mix, and they also expect some transparency when receiving quotes (along with, perhaps, multiple offers for side-by-side comparison).
Conventional wisdom may hold that digital channels will make insurance agents obsolete. But, as we have seen in traditional banking, there is still a place for the human touch. In financial services, the reduction of manual processes linked to reviewing loan applications, etc., has laid the foundation for a more personalized approach when a deeper discussion between client and provider is warranted.
Life insurance is complex and evolves as consumers’ families grow, or life insurance significantly influences estate planning. Therefore, consumers have to evaluate their coverage every few years. Claims/Settlements can also be a complex road to travel. That human touch, we say, leads to a trusted advisory relationship that a machine can’t easily replicate. The D2C digital shift may reshape the role of the intermediary in life insurance, but it probably won’t eliminate it.
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