How a North American Carrier Increased Their Term Life Sales by 18%
Almost since inception, the life insurance industry has dealt with the fact that it is both costly and burdensome to distribute a full range of insurance products to a wide variety of consumers.
There just simply isn’t the bandwidth within advisor networks to meet the needs of all customers individually, and have that process remain profitable. The sales cycle is typically a lengthy one, with little difference between selling complex higher-risk policies to wealthier brackets compared to first-time policies to lower risk, lower premium brackets. The underwriting process pulls data points from various sources that are collected and analyzed, often entirely by humans. These are subject to communication delays and lengthy reviews that do not lend themselves to the efficient conversion of new leads. Very high drop off rates were seen and few tech-savvy consumers were willing to engage with a process that, in their view, was from the dark ages when compared to other innovating financial sectors like personal banking.
One of our North American partners had been selling life insurance through captive advisors, though in recent years had branched out to call center sales and the web.
They knew it was important to look to the future and have processes that consumers can easily engage with. In the era of Amazon and Google, this carrier knew they needed to strengthen their digital offerings to distribute their life insurance products. They chose to launch a strategic marketing campaign using Facebook as their consumer outreach mechanism. There are 243 million users of the social platform in North America, with 58% of those in the 25 - 34 age range. This means a significant number of potential consumers who are transitioning through important events where life insurance begins to be considered a necessity. This was the target demographic - tech-savvy online consumers that prefer to engage from the comfort of their own home or on mobile, and that want answers and solutions offered up quickly with minimal interaction and hassle.
The campaign net was very successfully cast, with a high volume of interest generated by reaching the right people at the right time. The issue was that the response was so overwhelming that their agents simply did not have the time to follow up with all of the new leads. Using their existing processes meant that by the time they got around to calling a potential consumer, the engagement had disappeared and many of the applicants were no longer interested. The internet generation needs instant feedback and qualification, otherwise, they are very quick to move on to something else.
A bigger change was needed. The carrier recognized that they needed to implement a digital transformation platform from start to finish.
They needed a tool that would specifically allow them to target the right demographic of potential consumers with an engaging online user experience and convert those to policies sold. Successfully implementing such a tool would allow them to reach more consumers faster and in the way they want to be reached. Such a tool would also drastically speed-up time from quote to acceptance and ensure that call center agents were able to do their jobs in more efficient ways without the huge backlogs that caused consumers to drop. The big question was: how could they achieve it without committing massive resources to build such a solution internally?
The answer was to find an external solutions provider who could deliver quickly, iterate constantly and require fewer resources than an internal build would. This is where the partnership with Breathe Life was sought. Breathe Life had developed a consumer-centric platform that would allow this carrier to achieve their life insurance distribution goals while also reducing operational and customer acquisition costs.
All key features of the platform were built with the goal of replacing the pen and paper processes. The Breathe Life platform meant first-time buyers could fill out an application and get a decision upon completion, something that typically would have taken weeks in the past. This partnership created a win-win scenario for the carrier as it meant they had the best from both worlds, they could sell directly online with a consumer-centric interface but there was also the option to engage with advisors by phone for more complex products.
Instead of just delivering a one-size-fits-all platform, the Breathe Life team was ready to immerse themselves in the step-by-step aspects of the carrier’s client relationship management and life insurance application and underwriting processes. Understanding the key touch points between the insurer and the client, the drop-off points of clients, as well as knowing the scope of data needed for the carrier to make informed decisions, were Breathe Life’s priority. After all, one size doesn’t fit all.
The Breathe Life Platform also provided the carrier with support in their digital marketing initiatives. Breathe Life took the initial digital marketing campaigns launched by them and worked closely with their marketing team to supercharge them in order to better reach a newer generation of leads. The carrier’s marketing experience was transformed from a former single-channel approach to a strategy aimed at leveraging multiple online consumer touch points including social channels and affiliate marketing partnerships. Along with being able to reach consumers on multiple channels, Breathe Life, is able to better understand the consumer and use this data to build product and market insights reports. This has enabled the carrier to learn what works for particular demographics and therefore evolve how to target them for future campaigns. Reaching a wider audience in more focused ways has allowed them to distribute more products than before while lowering acquisition costs.
The results speak for themselves. In the first few months of using the platform, the carrier saw an 18% increase in sales with a 26% increase in premiums and a 33% decrease in customer acquisition cost.
On top of an increase in sales and premiums, and a decrease in customer acquisition cost, the carrier is seeing the sales life cycle reduced from weeks to minutes, with 44% of customers being instantly approved online. That is, from initial contact all the way through application completion, underwriting, first payment and the issuing of a full-term life insurance policy.
It has taken strategic foresight from this North American carrier to identify the need for a digital transformation platform in its route to distributing to an underserved market. It also shows an understanding that the core deliverables of the project would be better built by an expert InsurTech solutions provider such as Breathe Life rather than in-house. The future of the partnership is bright, with further planned developments of the platform to harness meaningful data that will drive continuous improvement directly benefiting the end-user.