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Life Insurance Reimagined: New Distribution Models Promote Health and Wellness

Bundles, partners, and ecosystems are the modern foundation for creating the one-stop shopping experiences critical to your future success

With consumers increasingly expecting one-stop shopping experiences, where they can investigate and purchase a range of related products or services, life insurers are beginning to embrace new types of product offerings and customer journeys to match.

Notably, a recent worldwide survey of insurance professionals found that offering a mix of protection and non-protection options and products tops our industry’s list of product development initiatives.

To understand, let’s look at how bundles, partnerships, and ecosystems are essential to transforming most life insurers’ product-centric approach to a customer-centric approach.

Encouraging continuous customer touchpoints

Whether it’s Apple or Amazon, today’s leading consumer companies focus on capturing consumers within their ecosystem by offering a range of products and services that encourage continuous touchpoints.

Translated to the insurance industry, this requires first viewing life coverage through a consumer’s eyes. Few of us want to think about our ultimate fate. Instead, we prefer to think about enjoying many years of health and wellness. Hence, life insurers need to pivot from selling only indemnification policies to offering bundles of products and services promoting health and wellness or saving and planning for retirement or their children’s college, for example.

In this model, life insurance becomes one of the several items in any given bundle. Leading insurers are already leveraging this approach with wellness packages, marketed as helping customers become healthier and live longer. Within the package are value-added tools and guidance for measuring and understanding a person’s health, along with incentives for reducing insurance costs. In addition to decreasing risky behaviors, insurers also gain data from customers for fine-tuning marketing, personalized product development, and delivery, as well as up-selling and cross-selling.

Regardless of the bundles’ products and services, successful implementations offer remarkably intuitive, highly personalized, and exceptionally responsive environments that create synergies between you and your customers.

Of paramount importance are simplified and streamlined interfaces that belie the sophistication of the underlying platform, integrating multiple technologies and partnerships that enable insurers to make continuous adjustments in a flexible and agile environment. In other words, static environments cripple this type of approach. Thus they must be stomped out before insurers can reach this ideal state.

Creating Engaging Customer Ecosystems

Engineering an engaging customer environment requires a modern technology approach. Here’s what insurers need to do and what’s in it for them:

  • Offer a robust mix of related and adjacent offerings that help you and your partners gain wallet share while simultaneously supplying relevant customer data. For example, a bundle that encourages physical activity could include a trekking pole supplier and a fitness tracking vendor, along with life insurance, advisory/concierge services, and even gamification to promote utilization. Each ecosystem participant gains data on customer age, usage patterns, health measurements, frequency of accessing advisory services, etc., to help them fine-tune marketing and introduce product innovations.
  • Adopt open technology systems with comprehensive API libraries and sophisticated intelligence capabilities to enable rapidly interconnecting with and disconnecting from with partners, quickly sharing data and proactively responding to individual customers as their needs and interests evolve. The benefits include speed and agility to capitalize on new opportunities.
  • Establish development sandboxes to test prototypes, complete proofs of concept, and build minimum viable products (MVPs) that you can launch and iterate as you gain market feedback through test and learn approaches. The benefit is that it limits your cost and risk.
  • Centralize customer ownership and assign a product-agnostic point of responsibility to ensure consistent, high-quality experiences and the opportunity to use a more complete data set. For many incumbent insurers, this necessitates a significant cultural shift from the traditional practice where each siloed unit interacts narrowly with customers based on line-of-business needs. The benefits here are many, including improved customer retention and Net Promoter Scores, increased share of wallet, and more.
  • Develop personalized growth journeys that meet your target consumers where they are. This can include metered options or short-term coverages based on activities, such as offering policies to weekend fat-tire bicyclists as part of a retail purchase. Then, stay engaged with these consumers, using the data you collect and transition them to more premium products and services over time, increasing customer satisfaction, share of wallet, etc.

Get started now

No matter what specific steps you take to reimagining your business, it’s clear our industry is at an inflection point. With business models, product and service mixes, and technologies all evolving and changing, it’s an exciting time to be a life insurer. The key to future success lies in forming new types of partnerships and participating in various ecosystems. This allows you to inspire your customers with individualized bundles and differentiates your business from your competitors.

The post Life Insurance Reimagined: New Distribution Models Promote Health and Wellness appeared first on EIS.