Reimagining the Life Insurance Model in 2023

Are you in the business of selling life insurance? We’ll walk you through the changing life insurance landscape and how to modernize your entire business.

What if Everything About Your Business Was Constantly in a State of Flux?

That’s what it feels like to the average insurance agent, especially those who sell life and health insurance. Demand for these products is still great, but everything from AI to embedded insurance threatens to disrupt the industry from the top down.

However, every seasoned insurance agency and agent understands that disruption also brings new opportunities. By staying on top of emerging life insurance trends, it’s possible to start reimagining life insurance to suit the needs of a changing market better.

What are the issues and opportunities facing those who provide life insurance? How can you begin to accelerate growth and exceed your performance targets, and what should an updated life insurance model even look like? Keep reading to learn the answers.

Economic Issues Continue to Affect the Life Insurance Industry

The first reality that the modern insurance agent must face is a bleak one. And that’s the fact that uncertainty is one of the top trends in life insurance.

A few years ago, NAPA reported on declining life insurance sales. According to NAPA, sales flagged by 3.2% from 2016 to 2017, and they projected that this might be a grim omen for the future.

This was correct; right now, inflation continues to rise, and the prospect of a lower GDP threatens to disrupt sales across the entire insurance industry. There are some slivers of good news, though. Banks are trying to tamp down on inflation by raising their interest rates, which helps to combat equity investment pressure. When the smoke clears, there will be an opportunity for agents and agencies to increase life insurance sales, though overall profitability largely hinges on accurate underwriting.

Enhancing Customer Service by Embracing Artificial Intelligence

Artificial intelligence is a concept that can seem a bit intimidating, especially if you don’t know much about it. But for insurance professionals who aren’t afraid to seize the moment, AI offers several ways to boost your business.

When done right, AI can enhance customer service, boost sales, and give you a leg up on the competition. Here's a closer look at what this emerging technology means for you and your career.

AI and Information: The Need for Speed

Those who have never experimented with AI often critically ask what the technology is suitable for. While the correct answer is “many different things,” the most relevant thing for your industry is that it gives you quicker access to data and analytical insights that can help drive service and sales.

For example, AI can help you quickly sort through your clients and find the customers likeliest to prove profitable based on their estimated lifetime value. When the AI does most of the analytical work for you with its impressive machine learning capabilities, you can spend more time marketing and selling to this lucrative demographic even as you discover more about their very specific needs.

AI and Underwriting

As helpful as artificial intelligence is when it comes to sales and marketing, it’s also invaluable when it comes to the underwriting process. This is because digitized AI can quickly compute the data provided and offer the most optimal course to the underwriters.

On the micro level, this helps you provide quick service to clients, who will be very happy with the speed at which you evaluated their claim. And on the macro level, AI can help you discover more about the risks your customers are facing and how your business can help protect them from those risks. This is more important than ever before in a rapidly-evolving industry.

AI: Your Secret Weapon When It Comes to Customer Service

So far, we have focused on ways AI can help with sales and marketing. But you can’t really succeed without keeping your customers happy, and it turns out this technology is a powerful tool when it comes to customer service.

For example, the average insurance customer is not very likely to walk into a local office for a sit-down discussion. They want to be able to browse different options on their phone. Smart insurance professionals can leverage AI to recommend specific products and insurance packages suited to prospective customers’ unique needs. Technology-savvy agents can even use AI to automate the underwriting process, automate many inspections, and generally save customers as much time as possible.

It’s a changing world out there, and clients will save their loyalty for the agents and companies who can bend with the wind. With AI and the right know-how, you can turn the chaos of a changing industry into serious opportunities.

The Need to Target Younger Demographics

Traditionally, we have imagined the primary demographic for life insurance to be those at least 40 years old, which is likely one reason that life insurance sales are down. And while this is still an important demographic to target, modern carriers and agents must also begin focusing on younger demographics to succeed against the competition.

For example, recent research revealed that 48% of Millennials own life insurance and that 44% of Gen Z adults have followed suit. And nearly half of each demographic believes they need to either obtain or increase coverage. By focusing more of your marketing and sales efforts on these demographics and the more traditional ones, you can boost sales even as you modernize life insurance.

This is especially important because you’re facing more competition than ever before. Private capital now accounts for nearly a tenth of the entire market, a significant change from just a few years ago. By modernizing your own business, you can do more than keep up; you can set yourself apart from the competition even as you offer top-notch protection of customers' private information.

Technology and Life Insurance: Bringing It All Together

Now you know about the need to modernize your business with AI and to target younger demographics. But do you know how to bring all of this together to become the next-generation life insurance provider your community deserves?

First, you need to focus on having a user-friendly website that customers can navigate on their phones. By using cutting-edge APIs, you can ensure the average visitor learns all they need to know about term life insurance and can choose the right package and make a purchase, all from the comfort and convenience of their smartphone.

Second, it’s time to go all-in when it comes to technology-enhancing customer service. Ask yourself: do you already have sophisticated chatbots offering 24/7 live support? Do you already have embedded insurance options prominently featured on your website? If the answer is “no,” you need to focus even further on technological development for the simple reason that your competition is already doing just that.

Third, and on a very related note, it’s time for you to partner with those who specialize in streamlining and using technology to enhance customer service on the front end and augment everything from underwriting to claims processing on the back end. Even though Insurtech funding went down last year, it’s important to find the right partner to help you reach more demographics and offer a more diverse array of products than ever before. Bending with the wind is one thing, but in the changing field of life insurance, the right Insurtech partner can keep your company from getting blown away altogether.