Research Reveals Future Trends in Life Insurance Sales

June 1, 2021

McKinsey & Co.’s recent research into the life insurance industry suggests what insurance marketers need to focus on to succeed over the next decade. At the top of the list were: personalized customer experiences, flexible product solutions, and upskilling of employees.

Personalize the Customer Experience

Many carriers, brokers and agents may believe they are already providing personalized customer service, however, McKinsey notes that a higher level of personalization is required. One area where this is needed is in consumers’ health management. Market data projects the population of Americans over 60 will increase by over 50% by 2030. These Americans will have a growing need for support from life insurers in such areas as information about healthy lifestyles, exercise, nutrition, health screenings, and disease management. The more personalized this information is, based on a customer’s health profile, the better. Some carriers are even testing out financial incentives for customers who demonstrate a willingness to develop a healthier lifestyle by losing weight, exercising more frequently, giving up bad habits, and keeping up with recommended health screenings and their annual physicals.

Further enhancing this personalized customer experience is insurers’ increased leveraging of their customers’ health data, more readily accessed and analyzed through digital platforms and other technologies. The impact of digitalization also will be seen in continuous underwriting processes through which more individualized offers can be made. Additionally, McKinsey’s research suggests that the application of digital tools will play a significant role in generating new leads, reducing customer acquisition costs by up to 50%, reducing customer churn by 30%, and generating 5% to 10% more new premiums.

Heightened Role of Flexible Solutions

In addition to and, as part of focusing on delivering a more personalized customer experience, insurance marketers are urged to provide products that meet their customers’ different life stage needs. Whether that is disability insurance and voluntary term life insurance, dental and vision products, critical illness and accident insurance, and/or identity theft protection and legal services, these flexible solutions will enable a company to both retain and upsell existing customers and attract new ones. Further, their costs need not be a burden on plan sponsors, but rather offered as part of an organization’s voluntary products. When supplemented with offerings such as access to telemedicine platforms and nurse help lines, an insurance marketer is well-positioned as a strong resource to employers/plan sponsors and their employees/members.

Upskilling

Delivering an elevated customer experience by applying new digital technologies will require insurance marketers to train their staff in new skills and processes. Employees able to use digital tools to access data, tailor customer offers, and embrace new ways of working will become increasingly more desirable, replacing those reluctant to give up old, manual processes. The younger generation, especially digital natives like Millennials and Gen Z, will have to be actively recruited and sold on entering the insurance field. A joint report issued in 2012 from The Institutes and Griffith Insurance Education Foundation titled, Millennial generation attitudes about work and the insurance industry, found that 80% of Millennials indicate that they have limited knowledge of the insurance industry. This, coupled with the finding that 25% of insurance employees anticipate retiring within five to ten years, suggests the industry’s need to embark on a well thought out recruitment strategy to attract younger workers. To achieve both this recruitment goal and digitalization more rapidly, some companies are looking at mergers/acquisitions. Regardless of the approach taken, it will be important for all insurance marketers to look at these strategies to future-proof their businesses.