3Qs with Ian Jeffrey, CEO & Co-Founder of Breathe Life
Q: As you know, September was Life Insurance Awareness Month (LIAM), the annual campaign designed to educate the public on the importance of life insurance. It’s also the second LIAM campaign since the start of the pandemic. Is the public getting the message?
A: Without passing any judgment on the annual campaign, I’d say the answer is both yes and no. Market data suggests that there has been an increase in interest in life insurance products, but sales of new policies – while growing – are hardly what one might expect in the face of a deadly global pandemic that has been raging for more than a year and a half. The life insurance industry has been talking about transformation for more than a decade, but when you compare the pace and progress against other industries, there is still a long way to go.
One of the examples that comes to mind is how eCommerce transformed the retail industry more than two decades ago. Digital as a sales channel was an entirely new concept and opportunity, and there were distinct winners and losers (think pets.com). Today, digital is understood to provide a sales channel – it’s not a revolution anymore. In fact, we see eCommerce giants building brick-and-mortar stores.
However, the life insurance industry, while recognizing the potential of digital sales, still sees the digital opportunity as transformational and has yet to unlock the digital channel. That is certainly not how consumers see things. You can buy cars online, houses, toilet paper…but you can’t buy life insurance? That’s crazy.
Companies that sell direct to consumers, such as Ladder Life, Ethos, and Bestow are currently considered to be insurance industry disruptors. But selling direct to consumers online today is hardly equivalent to the dot-com era. I take a longer view given the lessons learned from eCommerce: digital is a channel, one of several. Real disruption is going to come from emerging channels and opportunities. So the Insurance industry not only needs to leverage existing digital channels, it also needs to prepare for new channels that become established over the next decade.
Circling back to the question of life insurance awareness, the data suggests that the public is increasingly aware of the need, but it’s still way too hard to buy. Personally, I believe that this is simply one of several ongoing challenges facing sales of new policies.
Q: What are some of the other challenges you see facing the life insurance industry?
To be clear, the life insurance industry does have many challenges, but the opportunities are MASSIVE, so it’s so worth it to address and overcome them. First, the current value chain is far too complicated, with too many intermediaries and siloed systems to succeed in the modern world. Technology investments are outdated, legacy systems are hard-wired and inflexible, and existing industry stakeholders aren’t agents of change.
The old saying, “if it ain’t broke…” could have come from the life insurance industry. The challenge is that the industry IS broken, but as long as there is enough revenue to satisfy shareholders, who cares? Sure, it’s still hard to buy life insurance, but not impossible – some people are figuring it out. Sure, it’s still expensive to get good coverage, but there are enough wealthy people who can afford high premiums. And, sure, advisors are making most of their money off policies sold 30 years ago, but as long as they are happy…?
In my book, “sure” is far from optimal, and optimal is where the industry needs to head.
Also, there is a lot of chatter about the life insurance protection gap – it’s huge, and despite the hype, no one is really focused on closing it. We can’t simply digitize analog processes and hope that it’s going to be enough, but that is pretty much where the industry stands. The vision is bigger, of course, but making a paper application available online is not transformative, and it’s not going to close the gap.
We need new products targeting a broader range of consumers at different price points. We’re going to need new incentives programs designed to reward advisors that tap into new markets. And we’re going to need new, data driven technologies that simplify the life insurance value chain, unlock new distribution channels, and always ensure that the consumer remains at the heart of every transaction.
Q: If the existing industry does not have change agents, where will they come from?
There are change agents in the industry, don’t get me wrong, but innovation isn’t really in the DNA of most life insurance companies. Think about the banking industry 15 years ago – online banking? No branch offices? That was crazy talk then, but many of us haven’t actually walked into a bank in years.
Fortunately for the life insurance industry, much like we saw with banking, there are real change agents in the wider ecosystem – the tech platforms, including companies like Breathe Life. If we look back to the lessons from eCommerce, you don’t have to look much farther than Shopify.
Before Shopify, brands spent years and $$$ building their own eCommerce platforms from the ground up. The life insurance industry is still doing this. Before Shopify, many retail brands felt that it was necessary to build their own platforms given their unique value propositions. Maybe it was, but it’s not necessary anymore – and the same is true in the insurance industry.
The life insurance industry also needs tech platform companies, just as Shopify was to eCommerce, and this is where Breathe Life fits in. Our focus is on innovation in life insurance distribution, and our Hybrid Distribution platform connects all channels (existing, new, and yet to be imagined), uses data to understand your consumers, and prioritizes their experience with your brand.
Our model is to partner with the existing industry, drive innovation, enable change, and ultimately act as the operating system for modern life insurance distribution. Breathe Life is fortunate to have strong partners that share our vision and value our expertise. While our carrier partners are focused on what they do best – life insurance – we focus on what we do best – enabling modern distribution. Together, we work to challenge the status quo, reimagine the business of life insurance, and increase the global adoption of life insurance.