The agency channel continues to be the primary distribution channel for life insurance carriers, accounting for more than 90% of new policy sales. While online purchases of life insurance policies are gaining momentum, they are primarily limited to straightforward products such as term life insurance. However, when it comes to purchasing permanent insurance products like whole life, universal life, and annuities, customers typically conduct online research, but still require guidance and support from an advisor to fully comprehend the benefits, provisions, and clauses in the policy. Life insurance carriers strive to equip agents with cutting-edge tools and techniques to enable them to spend their time productively on policy sales activities, rather than routine policy servicing. Here is the perspective on how Life insurers can digitally empower agents for seamless sales and monetize business opportunities
Digital Empowerment Tools for Agents
Life insurance contracts are long term and complex to understand. Empowering agent with Digital tools and technologies is critical for the success of insurance carriers to stay competitive, increase market share and profitability. Thanks to the technology enablers that are making sales process seamless, unbiased and on scientific basis. Let us review various technology enablers that carriers are providing to agents to enhance their productivity and efficiency.
Leads Management: Leads management plays a crucial role in driving sales and modern-day customer relationship management (CRM) systems offer excellent functionalities in creating leads, assigning leads and tracking leads till their closure. Customer life events are captured into CRM from public data sources as well as internal carrier systems. Life events are like joining in a new job, buying a new house, buying a new car, getting married, new child born etc. and each of them trigger potential opportunities for selling insurance. Internal carrier systems that are integrated with CRM system also provide very good leads. For example, take a financial institution which offers home loans and life insurance, whenever home loan is processed in the loans system, lead will be created in CRM system. Leads are also generated when customer expresses interest to buy insurance from carrier’s website or contacted by insurance carrier staff. After leads are identified, agents will be assigned to those leads based on certain criteria like nearest location of the lead, complexity of the product, agent’s license or authority to sell that product line, type, competency, or capability of the agent to handle the specific lead profile. Many CRM systems offer functionalities for agents to scheduling appointments with leads, tracking the progress, sending reminders until the lead is closed.
While CRM systems are helpful for lead management, there is an opportunity to use predictive analytics to identify potential leads before they even enter the CRM system. By analyzing customer data from multiple sources, agents could predict which customers are most likely to need which insurance products, and reach out to them proactively. This would require the development of advanced data analytics tools that can process large volumes of data in real-time.
Illustration and Quotation software: Life insurance illustration is the core piece in the sales process and is a highly impactful tool for an agent. Illustration often contains 20 + pages of densely packed numbers and legal disclaimers and is mandated by regulators in many countries that the agent and the policyholder must sign the illustration and attach to the new business application. Since life insurance contracts are long term in nature, illustration helps customer to understand how policy benefits accrue year on year until maturity based on guaranteed and non-guaranteed assumptions. Cash value projections, death benefit projections, expense charge summaries are all explained using rich visuals, graphics, charts, tables etc. which will facilitate the agents to explain the policy features to the customer. In addition to comprehensive illustration software, carriers usually provide agents with quick quote software in the form of mobile applications to quote premium for specified face amount or quote face amount for specified premium instantaneously.
While illustration and quotation software are helpful for agents, they can be difficult for customers to understand, especially when dealing with complex insurance products. Augmented reality (AR) technology could be used to create immersive and interactive experiences that allow customers to better understand the benefits and features of different insurance products.
Customer Need Analysis and Product Recommendation: Life insurance policy cancellation/ full surrender is a loss for both policy holder and insurance carrier. While mis-selling by the agent is the primary reason for policy surrender/ customer churn, many a time lack of understanding and not doing thorough analysis of customer needs are the root causes. Regulators in many countries are mandating agents and insurance carriers to fill up a standard need analysis worksheet of the customer before selling life insurance. Life insurance carriers are empowering agents with need analysis software to their agents. The software does life stage analysis, goal prioritization and then recommend suitable products based on the risk profile of the customer. If the goal is family protection, software uses HLV (Human Life Value) method to arrive at sum insured required to fulfil protection needs. Similar calculations are available for retirement planning, long-term wealth creation, critical illness, disability income, long-term care needs etc.
One innovative approach to accelerate customer experience transformation is to leverage big data analytics to gain a deeper understanding of customer behavior and preferences. By collecting and analyzing customer data across multiple touchpoints, insurers can create a more personalized experience for their customers and better tailor their product recommendations.
Agent Portal and Customer Collaboration tools: Carriers offer agent portal to empower agents with necessary details in real time including mobile devices support. Some of the functionalities offered by typical agent portal include
- Pending book of business including not in good order (NIGO) requirements
- Issued book of business – premium payment options
- Point-of-sale forms – downloading of various forms and questionnaires
- Downloading of commission statements and viewing commission history
- Customer collaboration tools like video conferencing, co-browsing, scheduling appointments with customer.
However, what if we take this concept even further? Imagine if carriers developed an AI-powered agent portal that could not only provide agents with real-time information but also offer personalized recommendations to optimize sales. For example, the portal could analyze an agent's book of business and identify customers who are more likely to churn or who have a higher potential for upsell opportunities. By providing agents with this type of insight, carriers can help them become more efficient, productive, and effective in their roles.
ACORD Compliant forms: As part of new business application process, agents need to attach various forms like ‘Moral Hazard Report’, ‘Occupation questionnaire’, ‘Financial questionnaire’ etc. depending on the type of application. ACORD forms which are fillable online enable agents to gather and transmit data faster and facilitates straight thru processing. It also helps carriers to easily download the data into core systems, stay current and meet regulatory compliance requirements.
While the use of ACORD Compliant forms is common in the insurance industry, there are still many opportunities to improve their effectiveness and efficiency. For example, carriers could integrate these forms into their agent portals or electronic application systems to further streamline the process and reduce errors.
Electronic Application: e-App is an electronic version of new business application that uses e-signature and sends application electronically to the carrier. It surpasses the limitation of paper-based application viz. inadvertently miss answering a question, invalid data entry into fields, delayed submission and manual indexing of applications into new business system. It also facilitates asking reflexive questions based on the responses to previous questions, eliminates NIGO requirements, reduces cycle time and increases placement ratio. Many carriers provide agents with electronic application submission to facilitate straight thru processing.
Furthermore, insurance carriers must prioritize the integration of e-Apps with other applications, such as agent portals, underwriting engines, and third-party data providers, to improve the speed and accuracy of decision-making.
Digitally Empowered Agents are the Future of Insurance
The digital empowerment of life insurance agents with tools and technologies is crucial for the success of insurance carriers in today's competitive market. From lead management and illustration software to customer need analysis and agent portals, carriers are providing agents with a range of tools to enhance their productivity and efficiency. However, there is still room for improvement, and carriers can leverage emerging technologies such as predictive analytics, augmented reality, and AI-powered portals to provide a more personalized and seamless experience for both agents and customers. By embracing digital transformation and adopting innovative solutions, insurance carriers can stay ahead of the curve and drive growth in an increasingly dynamic industry.
About the Author
Naresh Kumar Kesanapalli,
Principal Consultant – Insurance at Tech Mahindra
Naresh is a life insurance SME, representing insurance domain competency team of Tech Mahindra. Naresh brings with him 28 years of experience in life insurance domain which includes insurance operations, insurance software product development, platform modernization, delivery management and thought leadership.
Ravi Kumar Nadimpalli: Life Insurance SME at Tech Mahindra
Sree Rama Chandra Murthy Edara:Head, Insurance Competency, at Tech Mahindra