Middle income Americans know they need life insurance. And they’d probably prefer to buy it online.
Exhaustive research of the middle market and its insurance buying habits identify clear trends. Here’s what we’ve learned:
- According to LIMRA, a sizable portion of the buying public (85 percent) agree that most people need life insurance, yet just 62 percent say they have it;
- They don’t buy it because they think it’s too expensive — three times the actual price, according to an August 2013 article in Life Insurance Selling; and
- 61 percent of U.S. customers who recently sought information about individual life insurance products made the Internet one of their information sources.
All of this leads to the inevitable conclusion that offering simple, affordable individual life insurance products through a digital distribution channel could give the industry access to the large, underserved middle market. A Web-based channel that provides a satisfactory customer experience on a mobile device, which capitalizes on the popularity of social media, is a logical approach to this market.
The Web-mobile-social approach
Americans’ use of digital devices is not just growing, it’s mushrooming. Consider these statistics:
- 53 percent of U.S. mobile owners over age 15 have a smartphone;
- 66 percent of individuals age 16–24 own smartphones, according to Pew Research; and
- Customers with annual household incomes of $75,000-$99,999 buy online more often than those in higher or lower income groups, according to LIMRA.
A digital middle market strategy targets customers who hang out on the Web, shuttling among social sites with their smartphones and tablets. They use the Internet to conduct all kinds of personal business, from ordering a pizza to shopping for a car. They are very comfortable with technology and their Web wanderings expose them to sophisticated retail and social sites that raise their expectations about the customer experience. Clearly, responsive design is a must-have because they know a website can look as good — and be as easy to use — on a cell phone or tablet as on a laptop or PC. Looking at it from the developer’s perspective, the site must be flexible and easily modified to keep pace with changing consumer needs and habits.
No approach to developing a new digital online distribution channel is simple. Buying a large system can become a maintenance nightmare of legacy code that is difficult to integrate with other systems. Building from the ground up can quickly become highly complex, stretching the development time frame far beyond original estimates.
An alternative is a hybrid approach developed through careful assessment of the environment, in-house capabilities and availability of off-the-shelf functionality. For experienced Web development teams, managing the project internally allows quick decision-making and implementation as well as branding control. Using internal staff and systems also ensures the strict data privacy and security requirements that are now commonplace.
Complementing this approach by integrating best in breed purchased systems such as identity verification or e-signature capability ensures use of the best the market has to offer.
Build in flexibility for future change