Distribution Matters features conversations with Breathe Life customers, partners, and the industry at large on life insurance distribution challenges and opportunities.
This article features Mark Laramee, VP Solutions Business Development at Swiss Re
Swiss Re is one of the world’s leading providers of reinsurance, insurance, and other forms of insurance-based risk transfer. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients.
Q: The life insurance industry has been talking about the protection gap for many years now, have we made progress? What more needs to happen?
A: I’m an optimist, and I’m passionate about this issue. Everyone should have access to life insurance protection, because it’s really pennies on the dollar when compared to other stop-gap measures like Go Fund Me or dipping into a 401K. One of the great things about individual life insurance is that its benefit is tax-free to the beneficiary. Unfortunately, many people don’t even consider life insurance, because they assume it’s too expensive. We need to change that story and reach more families that need life insurance protection.
The industry is making progress, and the pandemic provided a bit of a catalyst for change in both consumer attitudes and carrier sales processes – but the gap remains, and we must continue to prioritize closing it. In my opinion, it’s going to take a multifaceted approach that includes innovation at every level. We need to provide more benefits through the workplace, find new ways of reaching different, traditionally underserved communities, and show people that life insurance is affordable. We must address the perception that life insurance is only for the wealthy. As an industry, we also need to challenge the status quo and embrace disruption.
I like to say, ‘if we’re not failing, we’re not trying hard enough.’ We have to innovate and try new things, even if that means making some mistakes along the way. Change isn’t easy.
Q: How has the pandemic changed – or not changed – the life insurance industry?
A: There are many ways that the pandemic acted as a trigger, especially when it comes to digitization and reimagining the sales process. But there is one thing that hasn’t changed that I think is important to mention: life insurance is a trust and relationship business. People may not be sitting down face to face with an advisor, but they are video conferencing, and this personal touch makes a difference.
As far as significant changes resulting from the pandemic, I think there are several. First up, people are more aware of their own mortality. We’ve seen that COVID does not discriminate. It doesn’t care if you are wealthy or not, have life insurance or not. This is why we have to change the story, because more families could get protected if they tried instead of assuming it’s out of reach.
On the industry side, we’re starting to see real changes to how we approach the consumer experience. We had to, obviously, but a lot of these changes are here for good – especially where distribution efficiency is enhanced by technology. InsurTechs are innovating and enabling new ways of engaging with consumers that the industry needs to embrace. It’s a challenging but very interesting time to be in the business of insurance.
Q: If you could change one thing about the industry – wave the proverbial magic wand – what would you change forever?
A: I view the industry very holistically, so if I could wave a magic wand, it would be to get the industry – the ‘royal we’ – to break down existing barriers, roll up our sleeves and work together to meet the massive need that exists in the market. Sure, there are lots of things that need to change, lots of things that are changing now or have changed because of the pandemic – it’s all good. But when you look at the big picture, the industry needs to work together to find ways of reaching different demographics, to create more innovative products across a range of price points, and generally change the widespread perception that life insurance is just for the wealthy.
My team at Swiss Re is focused on being drivers of growth and innovation in this industry – it’s our purpose, and my passion. Every day when I wake up, I’m thinking about how we can close the protection gap and reach underserved markets. It’s a challenge that we all need to work together to meet and it’s more important than ever as we experience the impacts of a global pandemic.