Insurance providers and everyone along the distribution chain have long prepared for the upcoming technology infusion that would transform the delivery of life insurance and associated products to customers. That technology transformation sneaked more detailed at a glacial pace up until the COVID-19 pandemic pressed an industry that depends on face-to-face contact to accelerate its
strategies. And something took place along the way to the
new cyber-reality: Insurers, intermediaries and agents all learned they can count on technology to forge a new way of selling insurance items.”It actually is touching every element of the business,” said Kara Hoogensen, senior vice president of specialized benefits at Principal Financial. Principal is just one of lots of carriers that accelerated long-debated innovation plans. For example, an online application option in use for life insurance was quickly adjusted for use with Principal’s disability insurance items. “We certainly worked to get that out into the marketplaces as quickly as we perhaps could,”Hoogensen stated.” It’s just easier
to do service virtually and digitally at this point in time, instead of having a broker sit throughout the table and help a specific fill out a policy for income replacement.” ‘Some Pressure’ Similarly, Principal accelerated usage of its Human API platform for consumers to offer access to their electronic health records. The efforts are helping Principal limit its pandemic effect, Hoogensen stated. “We are visiting some pressure on our premium in the near term, but we are positive that it’s going to be a short-term effect,”she added. It’s a comparable story at Foresters Financial, where executives fast-tracked several technology initiatives to assist the business flight out the
pandemic, stated Matt Berman, chief distribution officer. The company is well positioned, Berman said, because the majority of its life insurance business is already nonmedically underwritten, suggesting no blood or fluids are required. The actuarial calculation is an important bottom-line formula that can get thrown off if significant changes are not deftly dealt with. Foresters, like the majority of insurance companies, topped its last expenditure entire life insurance product at age 75. Previously, sales of that product were capped at
85.”When you eliminate blood and fluid on totally underwritten prices, but with the math that we do to make this profitable, you may have X percentage of mortality slippage,” Berman said. “But if you have fewer hands touching the application from entry to issue, what you’re hoping is that functional performance should neutralize the mortality slippage. So net-net, you’re still either positive or neutral.”
Almost four months into the pandemic, it is the sales that are keeping losses low for insurers like Foresters. All items on the company’s e-app and non-face-to-face platforms preserved constant sales, Berman stated.
“Only in the locations that have actually been solely supported by either a para-med or a paper app, we saw a dip in sales,” he added.
Assisting Middlemen, Too
Even more down the distribution chain, innovation is also helping independent marketing organizations keep insurance coverage products moving.
“I do not think there’s going to be a go back to where we were,” stated Mike Kalen, CEO of Covr Financial Technologies. “Everyone appears to like it. Carriers are comfy, intermediaries like Covr are caring it, and the advisors, representatives and customers are all gaining from simplification and getting policies quicker.”
Covr deals with the majority of the major life insurance coverage providers in the market, and many of them are increasing the face amounts eligible for underwriting without a medical exam, he explained.
Amounts are still on the lower end– typically up to $3 million at most– but the quick adoption of technological platforms is helping close more life insurance coverage sales quicker. A market long resistant to a complete accept of technology is now forced to utilize it as much as possible.
The early returns are encouraging, Kalen said. Covr is amongst many business offering platforms to accelerate underwriting without medical examinations, enable electronic signatures and deliver policies electronically.
In 2 months, the portion of applicants under age 60 going through sped up underwriting leapt from 33% to 50%, Kalen said, pointing out Covr statistics. That is on life insurance coverage policies up to $1 million.
Before the pandemic limitations, Covr provided simply 10% of policies electronically, which suggested agents still needed to fulfill several times with clients. In 8 weeks, that number grew to 62% of policies delivered electronically, Kalen said.
“That saves 21 days on the process instead of having it mailed,” he described. “Five mail drops has actually now gone to one e-mail. So it’s gone from 21 days and 5 stamps to one e-mail and an authentication DocuSign.”
Insurance companies are growing more comfy and trusting of the procedures, Kalen said. Big data availability is making medical evaluations more exact, which indicates good deals for prospective clients.
“We believe that over time, the offers have actually improved,” Kalen stated. “Suggesting that 2 years earlier, you constantly felt that your healthiest customer got the second-best rate, like the insurance provider had built in some conservatism into their rates. Now we feel the healthiest customers are getting the very best rates.”
More Truthful Than You Believe
The life insurance coverage application procedure starts with the potential purchaser self-disclosing medical conditions. And surveys are revealing that consumers are in fact more honest than anticipated, Kalen stated.
“The insurance providers think that clients are more honest with a computer or a trained call center person than they are with their representative,” he stated. “So right away we’re getting better information in the self-disclose part of the journey.”
Otherwise, the continued public availability of more and more data, such as criminal and financial, makes it easier for providers to complete the underwriting process.
But the development of technology in underwriting does not decrease the function or require for the insurance agent, Kalen said.
“I believe agents are understanding that their worth applies regardless of the procedure that they select to put their consumers through,” he stated. “So if an insurance representative can offer their consumers well-priced, basic insurance through a highly rated carrier, they are still adding a lot of worth.”