Much coverage has been given to the digitization of business — and the lack thereof in insurance — both within National Underwriter Life & Health and on this website. We are touching on the topic again in our August issue with the feature, “One-click life insurance?” which offers three hypothetical situations for the future of the industry. But are they really so hypothetical, or are they modern predictions?
When the feature ran online it understandably created a bit of buzz among our readers. If these predictions hold true, agents and brokers everywhere would be out of a job and – most likely – so would I. That’s a scary thought indeed.
But the purpose of such writings is not to invoke fear and anger, the purpose is to begin a discussion amongst insurance professionals around the “what if” scenarios – it’s risk management 101. We must begin to take notice. We must prepare. We must adapt.
Technological innovations – everything from smartphones to Big Data to cloud computing – is making it easier for everybody to do everything. Most significant to us, it’s making it easier for entities unburdened by legacy operating systems and solely brick-and-mortar networks, to enter fields in which they may not have experience with or vast knowledge of. And, as a recent Harvard Business Review article on the topic stated, “The industries most susceptible to disruption are those selling information-based services that can be delivered digitally – and a perfect example is the insurance industry.”
Further, EY, in their 2013 “Insurance in a digital world” report, states that insurers view digital as a key priority but are lagging far behind in implementing the necessary changes. In fact, 79 percent say they are not setting the baseline for digital or are still learning. With that knowledge, maybe it’s not so shocking that almost 80 percent of respondents do not see themselves as digital leaders.
But digital leaders we must become. And NUL is here to help all of our readers become leaders in the digital world by offering success stories of those agents or companies who have done just that, along with tips and advice on how to adapt successfully.
As for all insurance sales being done solely online, I don’t buy it. Yes, Amazon and Google could potentially – and perhaps successfully – sell insurance, but nothing can replace the knowledge, experience and face time a real life advisor offers a client. Nothing.
Plus, buying insurance online is not for everyone. Consider the affluent market, the majority of which would opt for a trusted financial advisor to handle their complex estate and financial planning needs, rather than a “one-click” life insurance policy or IRA option bought through an online retailer.
The middle market, on the other hand, illustrates an enormous opportunity for agents and brokers when it comes to online sales. Middle income clients, especially those within the Generation X or Y contingent, would wholeheartedly embrace the thought of purchasing life insurance, health insurance, financial planning advice, etc. through their computer. They already buy furniture, cars, clothes and groceries that way. So why not insurance?
Just as Darwin found that the survival of the fittest was not necessarily a function of the strength or intelligence of species but rather their adaptability, so too with successful businesses. Senior insurance executives will need to figure out how to adapt, or risk having their businesses left behind as the industry evolves.
The digitization of insurance is not an “if” question but a “when” question. And we’re here to help.