Transformative Trends in Life Insurance
Innovation is moving at digital speed through just about every industry. The life insurance industry has been trying to jump on board, but has been moving a bit under the average speed limit.Why? Well, you probably won’t find a more complex product, detailed purchase process, or more regulated industry. These factors have made innovation sluggish in a centuries old industry. While there have been obstacles, insurers are making progress with these key customer and industry trends:
Customer Experience and Expectations
The complex nature of insurance with both federal and state regulations and requirements, make easy customer experiences challenging…but not impossible. New streamlined processes and accessible methods of purchase are among the approaches that insurers are pursing to help customers have more, and easier, options to purchase.
Simplifying product design by removing complex riders and options, and customizing features to specific customer needs will improve understanding and expectations of what the products can do for individuals. Plain language in applications and policy documents are necessary to improve clients’ understanding and comfort level with products. Customers expect pricing transparency and control over options that affect price and meet their personal situations.
While some who consider themselves “old school” might wish technology would not advance so quickly, reality is digital purchases, or a combined approach with personal assistance, is the way of future for life insurance and other financial services. Integrating electronic data from medical sources, or personal fitness devices could assist or even replace some medical requirements.
Digital health monitoring could streamline application process as well as improve future contact with customers to cross sell other products and services.
Insurance has traditionally be a “sold”, not bought. This means customary distribution outlets, such as career agents, financial advisors, insurance brokerage hold the primary relationship with the customers. Bridging the gap with a combination of digital contact and future guidance on various life stages and events, can help insurers retain customers and obtain future opportunities. Partnerships with non-traditional distributors, such as retail based channels will expand potential markets and address customer experience and expectations.
The Future is Coming Quickly
The rapid advancement of these trends is constantly changing customer expectations. By integrating these industry trends of easy customer experience, advancing technology, and convenient purchasing options and locations, insurers can expand their market to customers who need life insurance but haven’t pursued it, bringing a completely new customer market to the industry. Life insurance companies focused on innovation will take action to transform the industry and grow it rapidly into new markets and customers.
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Celeste Bevilacqua is the Financial Services contributing editor for Innovaiton Excellence. She has been in the financial services and insurance industry for over 20 years with top insurance and financial companies. Currently she is a Financial Advisor with Edward Jones as well as an advisor to the town of Pawling, New York and the Chamber of Commerce on Economic and Business Development.
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