Other articles in this series:
- The Mystery of the Life Insurance Middle Market
- The middle market needs life insurance more than anyone
- Why has everyone been overlooking the middle market?
- Targeting the Middle Market — Where They are and When They Need it
Given the importance of the middle market to the life insurance industry’s future, it can be puzzling that the market has been overlooked for so long. It represents a potential $12 billion in revenue for insurance companies and agents, so why has it taken until now for it to become a hot issue? In my opinion, it’s not from a lack of will or desire to service the market’s needs but due to a lack of understanding of the market.
First, there have been misconceptions about this market. While it is defined by an income bracket, within that bracket, there’s a lot of diversity. A middle market customer can be a twenty-something or a fifty-something. These misconceptions have led to confusion about how to sell to the middle market, particularly millennials.
And yet, as my piece on selling to the middle market covered, they buy life insurance for the same reasons as generations past. Life events such as marriage, buying a new house or having a child all prompt them to consider the importance of life insurance.
Second, there has been uncertainty about how to reach this market. The life insurance distribution network hasn’t kept pace with the development of the digital marketplace and social media. Younger generations shy away from picking up the phone to ask questions, coming into an office to meet with an agent, or filling out paper applications. But life insurance companies have been playing catch-up when developing online applications and quotes.
Third, individuals within the market haven’t been perceived as having much value. While the market itself is quite large, each person within the market will generate a smaller policy than a high net-worth individual. With little difference in acquisition costs, there has been a preference to chase after higher-net-worth clients.
Breathe Life’s platform aims to solve this problem by slashing acquisition costs. One of our partners reduced the number of agents in their call center and still increased sales after integrating our platform within their website. Partnering with us makes it much more cost effective to sell to an overlooked market segment.
Fourth, the middle market is uninformed about life insurance products, how they work, and how they can help protect their family. In order to close a sale, agents will often have to spend more time educating the consumer. A Deloitte report on how to successfully sell to this market highlighted the importance of educating them. But that takes time, and time is money.
In the past, this reality drove up acquisition costs. Now, tools such as digital marketing, and online FAQ’s and applications, combined with the millennial desire to self-educate, have made selling to them less expensive than before. Online applications can ask questions to guide clients to the right choices for their life circumstances and provide definitions and explanations in pop-up windows.
Agents will be pleased to discover that there is no great mystery to selling to this overlooked market. The skills that they gained selling to other markets and older generations are still applicable, but now they are enhanced with the tools available on Breathe Life’s platform.
Stay tuned next week for the final article in this series covering how exactly to target and close the middle market.