Editor’s Note: This is the sixth installment of a six-part series on threats to the independent life insurance distribution channel, running in each issue of Life Insurance Selling through the remainder of 2012. To read previous installments, use the links below.
- Part I: Facing up to a graying producer workforce
- Part II: The impact of a universal fiduciary standard
- Part III: Competing against alternative distribution channels
- Part IV: The dangers of ignoring the middle market
- Part V: Combatting consumer apathy
- Part VI: Emerging technology and the future of distribution
Get used to the term, because you are going to hear it over and over again in the coming years, as life insurance carriers and agents use the phrase to describe how they seek to reach customers across a variety of interactive channels — with a website, via a smartphone app, on social media, through video conferencing, using a live support call center, or talking in person.
Many of today’s and even more of tomorrow’s tech-savvy consumers are or will be demanding instant, constant access to information, service and purchasing ability across a variety of devices and platforms.
A LIMRA study released in October 2012 found that 61 percent of consumers who researched individual insurance or annuity products looked online, which is a significant increase over the 38 percent who did so back in 2006.
“With two-thirds of Americans conducting searches online, it is not surprising that the number of people seeking information about life insurance and annuity products online has increased more than 60 percent in the last six years,” said LIMRA Technology Research Director Mary Art in a news release announcing the study’s findings. “However, despite the popularity of online sources, more consumers (69 percent) sought information from agents, brokers and advisors, who are often viewed as the most valuable and influential information sources.”
Art said companies need to understand that one size does not fit all when it comes to reaching and educating consumers about products and services. “Using a multi-channel approach will reach a broader audience in the ways they want to collect information and will most likely lead to more sales,” Art said.
The carriers are aware of this.
As customers grow ever more accustomed to the digital experience, life insurance carriers are taking steps to improve and increase their digital channel capacity and dramatically shorten what has traditionally been a very lengthy underwriting process. They are also going to get better at collecting and analyzing information about their customers, and these digital customer records are going to make it easier for carriers — either on their own or with the help of their agents — to upsell and cross-sell customers. By utilizing advanced analytics technology, they can mine customer data and search for trends. A good demographic profile of a customer allows a carrier to target that customer with products and services tailored to his or her specific needs. And identifying customers and niches that are the most profitable allows carriers to identify other high potentials and tailor messages to them.
Anyone who wants to sell to the ever-growing wave of digitally savvy consumers needs to be able to accommodate a customer wanting to switch modes of interaction according to preference. Consumers may start researching online, which might lead them to a smartphone app. They might finish with questions for a live call center rep or be referred to an agent in their area. And let’s not forget about how social media fits into the picture. Producers who can successfully navigate the compliance issues associated with social media (which more producers are realizing isn’t as daunting a task as originally feared) and make effective use of common social networking tools such as Facebook, LinkedIn and Twitter give themselves the opportunity to reach potential customers in a setting where they are increasingly looking for help.
Life insurance has traditionally been about community and building relationships, and that’s what social media is all about. Life insurance agents have always been social networkers, educating clients, investing in creating long-term relationships and growing their businesses through referrals long before social media existed. Social media is a logical tool for producers to embrace, as people share details about what’s happening in their lives freely via outlets like Facebook, LinkedIn and Twitter. When they get married, have a child, change careers or move, they post it. These are great triggers for life insurance discussions, and producers have an opportunity to use this information to initiate a discussion. Finding out more about your customers via social media is just part of a natural evolution to be where your customers are.
Producers need to “buy in”
At a breakout session (“Building Your Business with a Better Process”) during the National Association of Independent Life Brokerage Agencies (NAILBA) annual meeting in Orlando in November, in a room largely comprised of brokerage general agents (BGAs) and carriers, a speaker noted that carriers today are embracing new technologies designed to simplify and speed up the life insurance underwriting process. Consumers expect it. The trick is getting agents to buy in.
The challenge, as one speaker put it, is for BGAs to work to get their agents comfortable with these newer technologies like electronic signatures and electronic policy delivery. Show them how easy it is to use and how it speeds up the process, and agents tend to become quick converts.
That breakout session featured speakers associated with LIDMA, the Life Insurance Direct Marketing Association. In a related breakout session at NAILBA 31, LIDMA’s Pat Wedeking cited a LIMRA/LIDMA survey finding that roughly 1 in 4 life insurance policies sold today are purchased without face-to-face interaction with an agent. Wedeking and fellow session speaker Byron Udell of AccuQuote said they see buying habits trending this way but reiterated that it doesn’t mean agents are out of the loop on these sales — they just aren’t meeting the client in person. They talk to the customer over the phone. “Nobody can buy without talking to us,” Udell said.
Big impact for middle market