Term Life Insurance - Consumer Journey
The term life insurance industry is undergoing significant shifts. The customer journey for the industry still has significant issues which can be improved upon in order to enhance outcomes for both clients and companies. Most of the adjustments include incorporating new technologies, becoming customer-centric and being innovative with product design.
- Potential future clients should be aware of the brand prior to making purchasing decisions. Using innovative marketing techniques, some creative product design and digitally transforming the life insurance business model helps clients get a better perception of your business.
- When most consumers tend to over-estimate the cost of life insurance, sometimes by more than triple the actual amount, the organization needs to ensure that this knowledge gap about pricing is covered. When 63% of the market believes insurance is too expensive, they may be discouraged from attempting to engage with the brand.
- Consumers hardly make the first move to procure any form of life insurance. Insurance providers have to make the first step towards the sale of policies.
- Insurance agents should be provided with tools which can enable them to act at the right time. Two-fifths of life insurance purchase decisions in developed countries are driven by life events, such as a having a baby or moving into a new career, whereas only 28% of life insurance purchase decisions are driven by fear of accident or illness.
- In order to assist insurance agents to be prepared for these life events, insurance companies can use data analytics and AI tools to the benefit of both the company and their clients.
- Research indicates that more people conduct their own independent research after making the first contact with an insurance company. They seek advice online, compare prices and services and even consult agents.
- Insurance should be more accommodating of multiple channels — digital agents, comparison websites, and even AI advisers can be just as effective or even more so than traditional face-to-face engagement with clients.
Mandatory Questions, Matching and Pricing
- While insurance companies must ask certain personal questions about an individual, for example, their smoking and drinking habits, loss of privacy is a major concern at this stage. Providing multiple channels to conduct the questioning phase enables clients to choose their most comfortable means and increases the chances of onboarding.
- Having no physical exam conducted would improve the chances of moving on to the onboarding phase; as many as 52% potential clients of life insurance companies said they were more likely to close the deal if it had not been for the physical exam.
- The process should be simplified as much as possible. As many as 19 million people are believed to have not completed the onboarding process, partly due to the process being long and complicated.
- Availing the document signing process online, including on mobile platforms, will encourage more people to sign up as more people adapt to the internet.
- This process should be simplified and shortened were possible as a lengthy process is a deterrent for potential clients.
Claims, Retention and Renewal
- Renewal of life insurance relies on customer experience. Customers are more satisfied when the insurance provider has an ecosystem that provides additional benefits or services. These include encouragement of good behavior, nudging them towards better practices such as helping them make healthier choices and to help customers with different situations, and even as far as behaving like a life coach.
- The use of technology, both wearable tech and utilizing the Internet of Things (IoT) which can assist with health monitoring, hazard prevention and with handling an emergency are encouraged. Research shows customers are willing to share more data with insurers if it results in an enhanced experience and better outcomes.
- Insurance agents who are motivated and inspire to care about their customers, and have procedures to deal with claims quickly and efficiently enable higher levels of satisfaction, which result in less customer churn and higher rates of retention and renewal.
- This final step of the customer journey should be a priority as the loss of clients due to non-renewals is a leading risk factor to the profitability and sustainability of insurance businesses; as many as 34% of the total life insurance clients can switch providers in a given year.