Low-interest rates are great for some businesses, like mortgage brokers. But for others, they make generating profits difficult. The Covid-19 pandemic brought with it a record number of life insurance applications as many families realized the importance of providing for their loved ones. But tight margins due to low rates made it harder for life insurance companies to make money on the uptick in policies.
Add in a clunky customer experience with outdated systems and a lack of digital, and not everyone has capitalized on the recent interest in life insurance. Even carriers who partnered with InsurTech’s who promised quick modernization have found that it’s hard to make money in the D2C market.
I believe that’s because D2C is just one piece of the puzzle. Insurers need a full platform that combines D2C with the ability to sell more complex products digitally – via advisors or agents. Consumers still want the human touch and advice, but now they want to connect with their broker online, by phone, or in the office, whichever channel works best for them at that point in time.
And with a full platform, selling life insurance is now faster and more profitable. Advisors can drastically reduce the estimated 20 hours of face-to-face contact it takes to sell a policy. If the client is looking to purchase a simple term product they can be directed to a D2C flow but if there’s a need for cross-selling or multiple complex products the advisor assist them using digital tools. One of our partners, La Capitale, has reduced the time to issue a policy by 125%. This has revived the interest of advisors who’d stopped selling their products due to the heavy time investment and low return, leading to higher sales.
David Officer, associate partner at Ernst & Young in Toronto, describes the direct-to-consumer channel in insurance as “exploratory” thus far. “Throughout all the demographics, there’s absolutely still a need for the one-to-one relationship,” he says. This is in part due to the products’ complexity. When purchasing a high value policy, people want to talk to someone who can explain the data underlying coverage limits and payouts in human terms.
In short, humanity and technology work best when they work together and when there is an end-to-end platform.
At Breathe Life, we view ourselves as a partner rather than a service provider. We provide the innovative technology and entrepreneurial spirit, breathing new life into our partner’s digital offerings. Based upon partner needs, we customize our core platform to support every person who will use it – from advisors to end-users.
To truly capitalize on the opportunities represented by InsurTech, life insurance companies need a platform that not only offers D2C but also provides advisors with the ability to sell complex products digitally. An end-to-end platform follows a consumer from prospecting, guides them through applying, gathers and analyzes data for underwriters, and then issues and manages policies.
Each piece, from lead generation to management, forms the picture of a profitable life insurance channel.