It’s common knowledge that businesses of all kinds and industries need to stay relevant and current in order to succeed. It’s vital that businesses adopt the most up to date technologies and procedures so as to stay ahead of the competition and remain profitable. The life insurance industry is no different, and many in the industry feel that life cover is in need of a 21st century reboot.
Businesses of all shapes and sizes are feeling the brunt of recent global issues, like conflict, natural disaster and economic crisis. These challenges are proving to be difficult for the life insurance industry too, so it’s essential that businesses in this sector take a look at their policies and procedures to see where improvements can be made. My experts agree that life insurance firms need to accelerate their journeys of digitalisation and use the best technology available to build systems centred on the customer, powered by personalise engagement. Firms need to embrace intelligent automation and cloud based solutions to meet the needs of younger generations and to reach their goals in regard to optimising cost in this difficult economic climate.
Declining Sales and a Shifting Market
For years, life insurance sales have been on the decline. Between the years 1990 and 2010, the number of life insurance holders dropped by a staggering 45 per cent in the United States of America. In 2010, only 44 per cent of all households possessed any life insurance, resulting in a 50 year low. This shift has been on the decline for many varying reasons. At the moment, the predominant reason is cost. Household budgets are so tight, there is no room to pay out for services that are deemed immediately unnecessary – many are focusing on simply covering the expenses of the day, not the insurance for the future. Another factor influencing this decline is the changing formations of households. Society norms develop over the years, to the point where the average age of marriage in women is 27, whereas in 1950 it was 21. The average age of marriage in men shows a similar trend, therefore the rate of household formation is considerably lower than it was in the past. Further to these factors is the increase in life expectancy. Individuals can now expect to live longer than before, causing them to put off from investing in the expense of life insurance and instead focusing on accumulating the income and savings they need to support their retirement.
Besides the decline in life insurance sales are the shifts in how these sales are made. Customers are now driven by digital technology and most want to take an independent approach to sourcing their financial solutions. Many want to initiate their decision making process through an online platform, and only later turn to an adviser for help in making a purchase. Insurers need to understand the changes in customer behaviour if they are going to continue to offer a product, and processes, that appeal to the current market.
With such consequential changes and shifts in the market, insurers need to rethink their strategies and engagement models to refocus on what customers really need. Life insurers in particular need to switch to a selling approach that focuses on the needs of the market and offers potential clients a valuable solution. Evidently, change is needed. But where do you start?
Four Keys Ways to Modernise Your Life Insurance Business
When it comes to modernising your business to fit the needs of a changing market, it can feel like a daunting prospect. However, the changes needed can be summed up in four key ways, most of which you will notice focus on your customer:
- Get to know your customer. There’s no point trying to sell something if you don’t know what your customers want. Don’t let your restricted view and incorrect assumptions limit your customer’s needs, but instead truly get to know what they want and what motivates them to make the decisions they do. Using a variety of tools and sources, you can get thorough, in-depth, actionable insight as to what is truly important to your target audience. Use social media, call centre data, customer feedback, any source of information that links to your customers to gain the information you need to make changes that will improve your sales.
- Offer things that appeal to your customer. Design new initiatives and products with your customers in mind, based on their real life needs. These products should be made available at a range of prices to suit different budgets, and marketing through a variety of channels to reach various customers. You need to use the many different tools available, such as mobile apps and social media, to get your product out there and marketed quickly and efficiently.
- Improve the experience of your customer. Instead of considering a life insurance purchase as a one-time event, think of it as a stage in a growing relationship. Work at customer relationships and use what you know about the client to create personalised offers. Use the data you gather through phone calls and online conversations to learn more about your customers and use such analytics to improve your sales processes and even create new products.
- Increase the efficiency of your business. Use the wide range of software tools available, such as iLife for life insurance agents, to improve your processes. From quote comparison tools to pre-built website templates, there are seasoned professionals creating useful platforms that you can avail yourself of. These tools will cut down your workload while increasing your sales, proving to be effective ways of improving the efficiency of your business. Throw out the old fashion paper based methods and embraced the automated ones that help you to provide a better service while cutting costs and saving time.
The Future of Life Insurance Providers
By accepting the changes in technology and the shifts in the market, life insurance providers can stay relevant and profitable!
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