Beyond the policy
Introduction
Into the looking glass
As we enter a ‘new normal’ – and thus a new era for life insurance – there is increasing pressure for insurers to curate products and services that are digitally focused, user-friendly, engaging, cost-effective and perceived as adding value.
The arrival of a new generation of consumers with different expectations, as well as the COVID-19 global pandemic are the two main factors driving demand for products that support and manage the lives of customers in a more holistic way.
Over the last two decades, technology has changed the relationship between businesses and their customers – and it continues to do so. And, of course, innovators and early adopters who are adaptable and who keep their fingers on the pulse of an evolving market and their customers needs will be the ones to reap the benefits of an ever-changing world.
A new era
The coming of age of a new generation
Hyper-connected, digital-savvy Millennials (born between 1981 and 1996) have replaced previous generations as the primary buyers of insurance. They are the largest generation on the planet today and, as digital natives who have grown up with technology, it heavily influences the way they live. They make up a chunky portion of the global workforce; now beginning to settle down, invest in assets and start families. By 2025 they will be the largest consumer group globally.
It’s important to note some of the factors that play into their buying behaviour:
They are the most educated generation of the day.
Having grown up with screen time amidst talk of holes in the ozone layer and melting ice caps, they are an environmentally conscious generation.
They have different expectations of customer engagement and getting it right is critical to gaining their trust and loyalty. Loyalty is not a given, it is earnt and continually scrutinized.
They share their experiences on social media and trust word-of-mouth by friends, family and dependable influencers over advertising.
What’s more, research shows that Millennials want to be engaged with.
They are looking for more than a transactional relationship with their insurer and have consistently remarked that they would be more likely to purchase a life insurance policy if the insurer offered benefits such as loyalty programs, wellness rewards, cash back, additional coverage and lower premiums.
In addition, life decisions also translate into business decisions. Earning and retaining their trust in the life market now could mean more opportunities for small and big business in future.
Beyond Millennials
The next generation to come of age will be Gen Z (born 1997 – 2015). What we know about Gen Z so far is that they have little to no memory of the world as it existed before smartphones.
Why is this important to know? Because reaching Gen Z customers by means of the technology they prefer will be even more crucial in the years to come.
With digital life sales surging there is a significant opportunity for life insurers to expand their market.
The rise of technology
The Internet of Things represents a fundamental shift in how people connect with one another, gather information and conduct their day-to-day lives.
At one time expensive luxury items, mobile phones have become an essential part of our lives for the majority of the population. It has taken over 25 years for mobile phones to transform into personal computers, with adoption skyrocketing since 2012 – and mobile adoption persists as new generations come to the fore and advances continue to flourish.
According to the Pew Research Center in 2019:
Of the age group 18 – 29, 96% of respondents used a smartphone. In the age bracket of 30 – 49 years, 92% used a smartphone. For 50’s – 64’s, 79% used smartphones. And for 65+, smartphone use was only 53%.[6]
Whether respondents resided in urban, suburban or rural areas made little difference to the mobile adoption trend.[6]
Furthermore, around seven-in-ten Americans use social media to connect, engage and share.
Proof that: having a presence is essential, engaging with the consumer is vital, and that tech disruption and innovation is here to stay.
A global pandemic
COVID-19 has ultimately impacted all of our lives, so it comes as no surprise that the crisis has accelerated existing trends in the life market.
If it has taught us anything, it is how quickly life can change and how financially vulnerable we are. This has prompted a surge in life insurance uptake as consumers look for some semblance of stability and prepare for the worst to ensure the security of their families.
And naturally – due to factors such as social distancing, quarantining and state mandated lockdowns – there has been a shift in how consumers are applying for policies.
A new way of life
Enhancing engagement through value-add services
Traditionally, the life insurance industry has had few customer touchpoints and engagement opportunities. But in this day and age, to retain customers insurers must rethink their model from pure cost-coverage to a broader lifestyle experience that includes health, wealth and wellness. Other industries are setting a high bar for customer experience and consumers are seeking a similar insurance experience.
They want to be engaged with. They want to hear from insurers more frequently with personalized touchpoints and cover options. They want value from day one. But above all, they want feedback fast and applications to be easy.
Thus, the move to start introducing non-coverage value-add services that align to and extend the policy has begun.
Providing a digital self-service experience throughout the customer lifecycle that meets the needs of their lifestyle is going to be crucially important to capture, engage and retain them. Creating an ecosystem to support them will not just be a nice to have, it’s going to be a fundamental requirement.
Examples of value-add offerings include wellness discounts, preferred access to gym memberships, access to online brokerage accounts and legal services. These components can broaden the scope of insurance policies by offering customers ‘day-one value’, not just at the point when the customer makes a claim. The insurer can offer them in such a way that they provide a single engagement and eliminate points of friction between the different participants in the ecosystem.
Intense competition and high margin pressure make improving retention a priority for life providers. A strategy focussed on offering a quality customer experience can be a key differentiator and drive growth through the acquisition and retention of engaged consumers. The sorts of services that add value for customers at every stage of their relationship with an insurer should be offered in order to achieve greater engagement and loyalty.
A new offering
Legal services - a new frontier in value-add
Traditionally, the life insurance industry has had few customer touchpoints and engagement opportunities. But in this day and age, to retain customers insurers must rethink their model from pure cost-coverage to a broader lifestyle experience that includes health, wealth and wellness. Other industries are setting a high bar for customer experience and consumers are seeking a similar insurance experience.
They want to be engaged with. They want to hear from insurers more frequently with personalized touchpoints and cover options. They want value from day one. But above all, they want feedback fast and applications to be easy.
Thus, the move to start introducing non-coverage value-add services that align to and extend the policy has begun.
Insurance companies have an existing dialogue with customers that is centered around planning for the future and protecting their families, their businesses and their assets.
In fact, as customers grow and their circumstances change there are opportunities for legal services throughout the lifecycle that tie into important ‘life events’ and can be used to position the insurance company as a trusted adviser. These services provide the insurer with the opportunity to communicate the value of their products to policyholders – not only at the point of sale, but during regular communications throughout the term of the policy.
Digital legal document preparation is a good example of a value-add service that adds a top layer to the traditional insurance model and increases the value of a life insurance policy.
By leveraging technology to deliver high-quality legal assistance services easily and cost effectively, insurance products can immediately deliver hundreds of dollars of value to customers. It can form part of customer acquisition; for example, the provision of a free or low-cost service such as Wills and Estate planning documents can provide an incentive for customers to complete the process of obtaining life cover. It can also provide an additional incentive for the consumer to purchase and retain the policy, and further builds the relationship between the insurer and the customer.
Epoq’s partners in the life market are moving towards greater customer centricity by offering digital tools that provide policyholders with a tailored legal service.
With Epoq’s logic-driven automated document system, insurers can offer life policyholders a quick and easy way to make a will, power of attorney or healthcare directive from the comfort of their own homes.
Our technology platform makes the process of creating complex legal documents quick, easy, consistent and affordable. Customers can simply go online via their computer or mobile device and answer a series of logic driven questions through a dynamic interview process. As these questions are answered the system uses AI to draft a document in real time where clauses are inserted, removed or altered. This results in a document that is completely tailored to the end users’ needs and are then stored securely online for easy management and access.
As an Insurtech provider, Epoq’s services are turnkey and can be switched on quickly with limited integration.
Case studies
Mutual of Omaha
Objective:
Build engagement and brand loyalty by offering free online legal services to employees with basic life or voluntary life coverage.
Objective:
Epoq Inc.’s technology has enabled them to offer wills, powers of attorney, healthcare directives and trusts at high volume.
Epoq services also form part of the United of Omaha Guaranteed Plus product.
Foresters Financial
Objective:
Help Foresters respond to COVID-19 and strengthen their customer relationships (over 70% of users were members accessing their benefits for the first time).
Solution:
Wills and estate planning site for members in the U.S, Canada and U.K. launched at the end of at the end of Q1 2020.
In the first 3 months there were 2,000 registered users and 4,000 documents created.
