Blog | January 25, 2024
Life insurance, often considered the slowest mover in the insurance and financial services realm, has experienced a remarkable digital awakening. The pandemic may have initially exacerbated differences of opinion on the pace of change, but it also compelled the industry to adapt and evolve rapidly. So, what’s in store for life insurance agents in this new digital landscape?
The complexities inherent in the life insurance business have long hindered its digital progress. The presence of legacy systems posed a significant challenge. However, the pandemic became a catalyst for change, prompting a remarkable catch-up phase.
Two noteworthy shifts emerged during the pandemic. Firstly, it heightened consumer awareness of mortality, leading to increased sales for most life insurance carriers over the past three years. Simultaneously, the need to expedite digitization became glaringly evident as remote work became the norm.
In response, carriers and brokerages swiftly embraced cloud-based and online platforms, relegating manual processes to the past. Notably, digital distribution platforms like Lavvi have experienced explosive growth, doubling revenue and hiring a considerable workforce to meet surging demand.
The pandemic has accelerated the implementation of long-term digitization plans within the industry. Some major insurers condensed their 10-year timelines into just three years. Much like other sectors, life insurance has adopted a more aggressive stance toward transformation.
Engaging the younger generation has become a focal point in this transformation. The 2022 LIMRA study revealed that Gen Z (aged 18 – 25) and Millennials (aged 26 – 41) increasingly consider purchasing life insurance due to COVID-19. However, a growing number prefer direct online purchases over traditional brokers or agents.
Gone are the days when younger individuals sought agents for life insurance policies. Direct-to-consumer initiatives are on the rise. Life insurers recognize the need for a ‘buy’ button on their websites, catering to digitally savvy consumers. There is also a burgeoning appetite for online financial tools, such as customer relationship management (CRM) systems.
While the younger generation seeks digital experience, agents remain relevant. The ongoing digital transformation doesn’t spell the end for them; instead, it ushers in a new era. Agents are becoming more sophisticated, aligning with the evolving expectations of younger clients.
The ability to provide valuable advice online has become paramount. Customers appreciate the added value of good advice, presenting opportunities for life insurance companies that equip their agents with the right support and tools.
As digitization continues to streamline processes, brokers and agents can expect more time for meaningful client interactions and less paperwork. Tasks are increasingly digitized, and systems are becoming more integrated. This means agents can serve a larger client base while focusing on enhancing the quality of their services.
What once took agents weeks to accomplish – meeting clients, quoting policies, and receiving commissions – can now be completed within a mere 30 minutes. The digital transformation is not just changing the industry; it’s redefining the role of agents for the better.