Insurance, so they say, is the next fintech frontier. And yet, all of the hype about insurtech is forward-looking; as of May 2016, insurance remains gloriously non-technological.
Though internet insurance has, to a certain extent, changed the insurance landscape, human agents still dominate the insurance market. In fact, it would seem that far from shrinking, the industry is acquiring more and more human personnel: from 2004 to 2014, the number of insurance agents, brokers, and service employees in the US ballooned from slightly over 879,000 to 1,007,000.
Has the influx of insurance agents helped boost insurance sales? Not in the life insurance sector, it hasn’t. Bloomberg’s Ben Steverman summarized McKinsey & Co. findings on why life insurance sales are plummeting: “complex and confusing products, paperwork that takes forever to fill out, salespeople who push their wares rather than provide objective information.”[caption id="attachment_7581" align="aligncenter" width="551"] per Bloomberg[/caption]
For now, then, the insurance industry is stuck in a particularly dull limbo: on the one hand, traditional insurance sales techniques aren’t working, and certainly aren’t drawing in millennials. On the other hand, insurtech, set to revitalize the industry, isn’t quite in place.
So until the insurtech revolution begins, here are 3 steps insurance companies can take to encourage millennials to purchase life insurance today:
Take a page from big banks
As part of their greater move to cut costs and boost efficiency, banks are closing down bank branches like crazy and moving more and more of their services online. In a recent podcast interview, Jamie Dimon revealed that Chase's online banking platform, Chase Online, has 30 million users as of May 2016.
Insurance companies have everything to gain by following in big bank's footsteps and gravitating their services online: they'll reduce costs as well as become more accessible to millennials, who are key drivers as early adopters of digital payments over cash and cards. At the end of the day, millennials are accustomed to simple, intuitive apps that allow them to make business transactions online. If insurance companies fail to take their first digital step by at least partially moving to internet sales, they risk being left behind when some of the new insurtech startups gain traction.
Get on top of your storytelling
As with any brands looking to engage millennials, insurance companies should create arresting content across social media platforms. In particular, life insurance companies should be - but aren’t - utilizing media platforms like YouTube as well as more nascent video platforms such as Instagram and now Snapchat to convince millennials that life insurance isn’t a luxury, it’s a necessity.
Trov, an on-demand insurance platform for single items, has shown that the insurance industry can create short, beautiful video ads that demonstrate why you need home owners insurance. Of course, Trov has the advantage of being an app that’s incredibly simple to use, making its argument all the more compelling: insuring your possessions is important, relatively cheap, and can be done with a single swipe - why wouldn’t you insure?
However, even without the seamless mobile app and the low price tags Trov has to offer, life insurance companies can generate moving video content about the impact of life insurance on families and friends. A video depicting the loss of human life and its financial consequences has at least as much potential to engage millennials and go viral as a video depicting the loss of a guitar, no matter how beloved.
Ben Steverman is right - life insurance is a major “life-and-death financial decision that no one wants to think about.” Nevertheless, if life insurance providers succeed in creating powerful narratives about loss and its financial wake, their online platforms have the potential to become a safe space for millennials to share their grief and learn about end-of-life financial decisions.
One company that was able to grow their exposure and the trustworthiness of their brand through community facilitation is American Express. The company's OPEN Forum provides advice, content, and resources to small businesses, and also serves as a platform on which small business owners can share their stories. With 400,000 Facebook likes and 202,000 Twitter followers, Open Forum proves that growing a committed online community around financial topics is doable and very worthwhile.
However, even insurance companies that don't have the resources to set up their own online greenhouse for communities can get in on the action by joining existing digital conversations on death and dying. Reddit, for example, has a thread called Death: Let's Talk About It. If life insurance companies enter this type of community respectfully and offer concrete financial advice to people who are dealing with death and grief, these companies have the potential to gain grateful, loyal clients.