How Life Insurers Can Prepare For The Digital Future NOW

by CXOtoday News Desk    Apr 18, 2017


Life-insurance companies that have been latecomers to the digital era,, are still selling the old-fashioned way, broker to customer, instead of empowering people to make their own decisions and participate in the process. Moreover, insurance-policy sales are still laden with excessive face-to-face interaction and mountains of paper. But consumers in every sector now demand speed, relevance, and convenience, no matter what channel they use or what product they’re shopping for—and insurance is no exception.

In a recent article by McKinsey, authors Prashant Gandhi, Jon Kowalski, Parker Shi, and Marc Singer believe, in order to stay ahead of the digital revolution, Life-insurance companies must take an omnichannel approach, providing compelling and relevant customer experiences no matter where their customers choose to interact. It requires a fundamental change in an organization’s operations and mind-set, affecting everything from the role of the agent to new, advanced, data-analytic capabilities. 

Here are some suggestions by the authors on how life insurance companies can prepare for the digital era now.

1. Modernize existing channels

The authors see several broad opportunities to modernize existing channels. First, the ability to insert life insurance into people’s daily lives and to use life events as triggers for purchase should be one of every carrier’s top priorities. To begin with, life insurance companies simply need to utilize tools such as social-media listening platforms to identify touchpoints and launch initiatives to reach out proactively to potential customers.

The second opportunity is in redesigning and automating interactions so that customers don’t wait 30 days for responses or abandon carrier websites because they are outdated or difficult to navigate.

Carriers should apply technologies such as click-to-call, cobrowsing, and live video chats that allow customers to interact on their own terms. E-signature can remove some of the hassle of paperwork. Such innovations will not only improve the customer experience but create opportunities to achieve greater operational efficiencies. 

Finally, customer information and interactions can be managed digitally through CRM tools, and advanced analytics can translate the resulting data into insights into how agents can improve their sales techniques.

2. Deliver a great customer experience

Exceptional customer experience can create a powerful competitive advantage. To deliver it, carriers need to develop a deeper understanding of their customers beyond just basic demographic information and web habits. They need to make use of quantitative and qualitative insights into customer behaviors, pain points, motivations, and aspirations, based on individual customers or through the development of “target personas,” i.e., a hypothetical amalgam of qualities and behaviors that represents a given customer segment. For example, activity on social media, purchase transactions, online behavior, household financial details, and demographics. Technologies to do this already exist that track customers across many online and offline channels, blending data from multiple sources to create a unified view of varied customer segments.

“Once a unified view of customer segments is in place, carriers can more accurately assess customer needs and appropriately personalize interactions in a way that will delight. Certain customers, for instance, will appreciate being able to use remote and/or robo-advisory models (e.g., online chat features). Leading financial-services institutions are embracing chat-bots such as Facebook Messenger or scheduling solutions such as, which allow customers to schedule meetings with advisors,” the article reads.

But while some customers can be served with bots and online self-services, many will prefer to rely on advisors to help them with complicated financial planning and to sort through their best individual options. Here, digital tools can work on the back end to help the advisors, allowing them to sift through policy options easily, combine various offerings, and quickly match them to customer profiles, said the authors.

3. Use data to create personalized products and services

In the next five to seven years, the most disruptive and successful life insurers will be those that excel in developing products, services, and consumer-facing digital experiences that are driven by customer needs and preferences. There are four ways that such products and services can be personalized, believe the authors.

The offerings can be personalized through the touchpoints that can best reach a customer at a specific moment. The banking and retail industries have already started down this more personalized opportunity path, they believe. Next, the messages themselves can be customized based on a customer’s needs and aspirations. Life insurance is fundamentally about the trust customers have in a carrier. Marketing messages should build upon this emotional connection and enhance the sense of the carrier’s empathy with its customers.

Also, personalized pricing can be tailored to a customer’s behavior, usage patterns, and loss-mitigation needs. This is already happening in the pricing of personal auto policies in the US.

According to the authors, “To enable such a sophisticated tailoring of offerings, carriers will need to invest in several new capabilities: first, the ability to use data capture and analytical tools to flag customer life-stage changes and events; then, a customer-interaction engine capable of pinpointing touchpoints and responding in real time to what companies learn about prospective customers as they go through their buying journey; and finally, a product factory that creates custom offerings and bundles based on customer behaviors, usage patterns, and pricing preferences.”


Finally the article mentioned that just as consumers have fundamentally changed, so too will the life-insurance business. Carriers who do not act to transform their interactions with consumers and put customer experience at the heart of their organization will find themselves relegated to selling undifferentiated products that not many customers are eager to buy. “In the end, digital life insurance is less about technology and channels than about embracing a new way of thinking and working,” they conclude.