Just a few years ago, the perception was that it was only ‘wild young kids’ that were hooked on technology. Nowadays, almost every demographic group is dependent on technological tools for communication. Life insurance advisors and their clients are no different.
Go Social, Or Go Home
Many consumers, especially Millennials, rely heavily on social media to interact with friends, colleagues and brands. Unfortunately, most insurance companies and advisors have failed to effectively leverage social media to build communities and nurture new business online.
Due to overly stringent compliance standards and inefficient legal screening processes, most large insurance companies have been unable to be active enough on digital platforms to tap into this vibrant consumer market activity. Therefore, this is an area where smaller agencies and budding advisors can compete with carriers in the realm of marketing.
It is important to stay up-to-date and adhere to current social media best practices. For example, a business should not set up social media accounts if it is not prepared to respond to customer service inquiries in a timely manner. There is nothing worse than messaging a company and never getting a reply back.
Social strategies cannot be all-encompassing; agencies and advisors should tailor their message to match the platform they are sharing on. For example, you wouldn’t distribute a piece of content on a Facebook company page the same way you would in a LinkedIn group. The audiences are different; therefore, the message and imagery used in each post should be different.
A good way for advisors to expand their reach online is to earn shares and mentions from influencers who represent target markets. Creating useful content is vital, but promoting it to the right people is even more important. Trying to go viral with a one-off campaign is not a practical strategy, therefore creating great content and consistently amplifying it through influencers is a much more viable approach.
Social media also allows advisors to tap into new communities through paid advertising campaigns. On most major platforms, brokers can now target their ads to specific demographics based on age, location, interests, behaviors, etc.. With a little bit of innovation, advisors can easily create highly-targeted social media marketing campaigns, at a fraction of traditional marketing costs such as TV or radio commercials.
By being consistently connected to an audience, advisors can provide a uniquely personal and real-time customer experience. As well, they can organically and non-intrusively build relationships with customers that may not have been possible otherwise, with the time restraints most consumers have in their day-to-day lives.
Digital Content is King
Today’s customer wants to be able to research, compare and inform themselves about policies online, before interacting with an advisor. According to a 2013 LIMRA
study, given the chance, 86 percent of consumers would prefer to conduct their life insurance research online. The best content online will directly address the target market's concerns by providing answers to their questions and solutions to their problems.
Alarmingly, over 61 percent of life insurers identify connecting with customers digitally as their biggest hurdle. As a result of this digital disconnect, insurers also risk missing out on an entire demographic; the millennials.
Today, with the exception of only a few offerings available in the life insurance market, a person interested in purchasing insurance must interact with an insurance agent at some point. In the coming years, that may not be the case, as technological advancements may allow the entire process to take place online.
Be Relevant and Stay Current
The relatively untapped Millennial consumer market has different needs than older generations and advisors could do more to better understand the needs of this growing consumer base. Many Millennials, being under 35, may not yet own a house or car and they may not have dependents or big liabilities to cover yet.
As such, advisors could promote the advantages of securing coverage while the applicant still young and healthy. The whole point of insurance is to protect oneself against the unknown. Nobody can predict exactly where their health and insurability will be in the future and that is a huge incentive for consumers to secure rates when they are young.
Technology creating disruption and more competition
For insurance brokers who traditionally make connections and sales through a one-on-one and face-to-face approach, technological change could become quite disruptive in the near future. Rather than stubbornly avoiding the inevitable change, it’s a good time for insurance companies and their representatives to adapt to new technologies and gain an advantage over competitors early.
Technological advancements have also been quite daunting for independent brokers and small agencies, which lack the brand power larger companies can achieve. Going forward, consumers will be able to compare rates and terms online, soon skipping past independent brokers completely.
An example of disruptive technology is Google Compare, which recently sent shockwaves through the automobile insurance industry in the United States. The website allows customers to compare customized car insurance packages online, directly through Google. Google has agreements with carriers directly and completely cuts out the agent.
Google Compare is just a harbinger of many other disruptive technological tools to come. In the face of these challenges, insurers and agents must develop strategies to provide value and support to the consumer, through their preferred online channels.
There Is Still Time To Adapt
Although it seems many younger consumers would be happy to purchase their insurance online, the vast majority of Canadians still want to complete the buying process with an advisor. In a survey by KPMG, it was found that 72 percent of Canadians who work with an advisor feel more confident making a financial decision.
Even more people (83 percent) felt it is very important to have personal interaction when purchasing insurance. This is because they feel the nuances and fine details of this investment can be better clarified and explained by a broker/ financial advisor.
This shows that despite the rise of disruptive technology, search and social media, having a personal relationship with an advisor is still very important to consumers. Therefore advisors should be accessible online but not do away with their tried and tested rapport-building practices.
Technology can produce many advantages for the industry as well. Insurers can easily gather and analyze data to be able to develop more accurate and personalized policy terms.
Furthermore, it is no secret that Canadian life insurance carriers are in dire need of new pricing models, so making full use of their actuarial data to offer more competitive premiums for consumers will give early adopters an advantage over the non-responsive providers. With data analytics, carriers can improve algorithms, measure a greater number of health related variables and develop personalized and more accurate policies.
Another positive benefit of new technology, is the possibility that insurance carriers could access an applicant’s health records through a national network, in the near future. This would speed up the underwriting process and cut administrative costs. Currently is takes upto several months for underwriters to receive and process medical files, ultimately costing consumers higher policy fees.
So while technological disruptions may be changing the way insurers and advisors must do business, it also presents many opportunities for the innovative and tech-savvy. In this digital age, the insurance industry must embrace technological change rather than shunning it. Addressing the digital challenge is not something that insurance companies and brokers should do, it is a must do.
It’s a matter of survival.
Today’s reliance on technology is astonishing. From the moment many of us wake up in the morning, until right before bed, we are constantly communicating through endless platforms. From checking our emails, to scrolling on Twitter, Facebook or LinkedIn feeds, we have truly become a hyper-social society, heavily reliant on technology.