How is technology impacting life insurance agents?

[Brian Anderson]

Starting this thread for a couple of reasons… as Forum vets see through BS instantly, I’ll readily admit that I’m looking for real-world feedback from agents in the field for an article I’m writing for our new print magazine – INSURANCE SELLING (premiering in April) – about how new technology is changing the life insurance distribution market. But I’m also hoping it will turn into an interesting thread providing some good perspective on where the life insurance market is heading in light of rapidly evolving technologies.

If you actively sell life insurance, please respond in this thread to (any or all of) the questions below, and know I might PM you about quoting you in the article with your name, company name and city/state. And if something you think is important to this topic isn’t covered in the questions, by all means please elaborate.

Thanks for your help!
-Brian

1. What are some of the ways new technology is changing the way you do your job right now? Do you think your job will look roughly the same in 5 years - or if not how do you think it will it be different?

2. Should it make agents nervous that so many tech startups or carriers are so aggressively trying to go direct to consumer, and cut the agent out of the picture? (Thinking mainly about online term life here – companies like MassMutual’s Haven Life, or Ladder, with its stated goal of “reinventing life insurance to be instant, simple and smart.”)

3. What are your thoughts about the way underwriting is evolving – like using big data, genetic testing or even photos to determine risk for life insurance, DI or LTCI? And do you think traditional medical underwriting will still exist in 10 years, or will it have been replaced almost entirely by automated underwriting?

4. What do you think of the prospect for a product like “microduration” life insurance – short-term coverage for when people do dangerous things like scuba diving, skydiving, travel to dangerous parts of the world, etc.?

5. Do you think Amazon or some other outside entity will soon enter and disrupt the life insurance market?

 

[ianbroker31]

Hi Brian,

Glad to hear that you're bringing back the magazine subscription. If I recall it used to be under a different name Life Insurance Selling

 

[MosesNewmanNAAIP]

I honestly believe that N.A.A.I.P. free website technology has given thousands of agents a fightin' chance to succeed in this hi tech marketplace. You can say that N.A.A.I.P is a market disrupter in the similar way that Amazon is.

 

[DHK]

The forum published its own magazine about 2-3 years ago with Ed Slott on the cover. Life Insurance Selling was bought out by National Underwriter... and then they merged with ThinkAdvisor with ALM Media.

The forum doesn't own "Life Insurance Selling".

Looking forward to the new magazine issue!

 

[DHK]

2. Should it make agents nervous that so many tech startups or carriers are so aggressively trying to go direct to consumer, and cut the agent out of the picture? (Thinking mainly about online term life here – companies like MassMutual’s Haven Life, or Ladder, with its stated goal of “reinventing life insurance to be instant, simple and smart.”)

"No, I'm not nervous about it at all. Why not? Because life insurance ownership is still at an all-time low, and it requires skilled and knowledgeable agents to tell the correct story about how life insurance really works - particularly permanent policies. Technology cannot replace that aspect of human interaction."

"However, since there are far fewer active agents today, and there will always be a segment of the population who are "do it yourself" types... to ignore that dynamic would not be good for companies."

3. What are your thoughts about the way underwriting is evolving – like using big data, genetic testing or even photos to determine risk for life insurance, DI or LTCI? And do you think traditional medical underwriting will still exist in 10 years, or will it have been replaced almost entirely by automated underwriting?

"With currently low interest rates and larger amounts of face amounts that should be purchased by consumers, I'm all for companies looking to streamline the approval process, particularly for amounts under $1 million."

"Let's think about it: To secure a $50,000 annual income (not a large income in today's standards), it takes a $1 million death benefit to replace that on a human economic life underwriting basis. Coincidentally, $1 million will generally be the maximum that one would be able to qualify for, based on the proposed insured's age. $1 million @ 5% interest would equate to $50,000 of income. Since interest rates are below 5% right now, $1 million is still not enough coverage, but it's about the maximum one can qualify for with today's financial underwriting guidelines with most companies. Individuals should be buying more insurance... and the easier the medical underwriting is, the better job agents can do in securing the proper amount of insurance coverage that families should have."

"However, for larger face amounts, I don't see traditional medical underwriting going away. If anything, this should be a clue to agents to do the full and proper job of securing the proper amount of coverage and that better pricing will be made available to those who go through the full underwriting process when they have more income to be secured."

 

[DHK]

1. What are some of the ways new technology is changing the way you do your job right now? Do you think your job will look roughly the same in 5 years - or if not how do you think it will it be different?

"The job is the same: initiate and engage with people to talk about their situation and determine their needs and wants for the future. Improved websites, concept videos, and other tools may make the job easier to communicate their value, or even help in the training of agents, but the actual job is the same."

"One thing I do like is that more and more companies are transitioning to e-app processes as well as computer disconnected e-app paperless applications. If anything, this means that the agent themselves are completing the applications, rather than having an assistant complete the paperwork. This enhances the chance to submit business 'in good order'."

 

[DHK]

5. Do you think Amazon or some other outside entity will soon enter and disrupt the life insurance market?

"Only if Amazon can tell a better story or engage with the consumer in a better way than I can. If you're only selling product, and you're not diving deeper into needs or wants... then those days are numbered. If you're helping people to solve their problems, and providing a consultation, providing advice and guidance, and do it with a unique experience, Amazon cannot compete with that, nor can any other digital platform."

 

[Brian Anderson]

The forum published its own magazine about 2-3 years ago with Ed Slott on the cover. Life Insurance Selling was bought out by National Underwriter... and then they merged with ThinkAdvisor with ALM Media.

The forum doesn't own "Life Insurance Selling".

Looking forward to the new magazine issue!

Yeah, I've kind of been "putting the band back together" from my Life Insurance Selling days for this. Have many of the same columnists and contributors lined up. When ALM merged LIS into NU Life & Health - deciding to keep the (longer) legacy "National Underwriter" title and kill off the Life Insurance Selling name for tax benefits, LIS was actually doing pretty well financially and it was frustrating they "merged" it into NU instead of the other way around. But goal is to try to get back to the original LIS mission of being a sales journal for the life insurance agent with a simple goal of helping agents sell more life insurance.

With this technology article (and in this thread), hope to shed light on how things are changing/will be changing due to the influx of things like automated underwriting, big data, artificial intelligence/chatbots, specialization (coverage for Vegans or runners, etc.)

 

[scagnt83]

1. What are some of the ways new technology is changing the way you do your job right now? Do you think your job will look roughly the same in 5 years - or if not how do you think it will it be different?

In the past 5 years my business has become around 95% paperless. All applications I take are now paperless and completed with E-Signatures. Even when face to face with a client I still do an e-app.

Utilizing technology has enabled me to become much more efficient and have more time for money making activities. It also has allowed me to hold off on hiring a part time assistant, saving a lot of money.

Because of this, I now work and have clients in states all across the country. I am adding new states every year. And if I choose so, I can do all of this work out of a home office, which puts an extra $1k a month in my pocket.


I think agents will see more and more improvements and accessibility in being able to do business online.

And we will see consumers becoming more and more informed because it is easy for them to research online now. The "informed consumer" is becoming a real thing. Ive dealt with consumers who know more about life insurance than some agents do. So more informed consumers will mean they are more picky about the quality of agent they use.

2. Should it make agents nervous that so many tech startups or carriers are so aggressively trying to go direct to consumer, and cut the agent out of the picture? (Thinking mainly about online term life here – companies like MassMutual’s Haven Life, or Ladder, with its stated goal of “reinventing life insurance to be instant, simple and smart.”)

Not really. People still value expertise. Agents might have to step up their expertise a bit and not just be a salesman. But overall, its not a worry at all for me.

3. What are your thoughts about the way underwriting is evolving – like using big data, genetic testing or even photos to determine risk for life insurance, DI or LTCI? And do you think traditional medical underwriting will still exist in 10 years, or will it have been replaced almost entirely by automated underwriting?

Life UW is evolving rapidly. I think that will be one of the largest changes over the next 5 years. More and more carriers are using modified methods that are less and less physically invasive.

I think its great and look forward to more of it. Clients want it and it speeds up the process. Its a win/win in my book and will only increase sales.

4. What do you think of the prospect for a product like “microduration” life insurance – short-term coverage for when people do dangerous things like scuba diving, skydiving, travel to dangerous parts of the world, etc.?

This already exists to an extent. Lloyds offers high-risk policies for short durations.

5. Do you think Amazon or some other outside entity will soon enter and disrupt the life insurance market?

Probably not. Google tried with auto insurance and failed.

Eventually, AI will most likely be the biggest disruptor for agents. But even then, there will still be agents, we just wont be doing as much of the front end and back end work. The middle and upper markets will still want personalized expertise, at least for the foreseeable future.

 

[shonceman]

1. I tend to be a "paper hoarder", so I love anything that helps me to go paperless. I'm mainly involved in Final Expense and Home Service. A very few years ago, I wouldn't have thought there would be great drive to improved technology in that end of the business, since it thrives on face to face interactions.

But American General L&A introduced their "SmartPad" in the late '90's. It was an early version of a tablet computer that predated the iPad by several years. It was initially developed to manage collections by debit agents, but also included fairly thorough client databases with contact & policy info. Over time it evolved to include entirely digital paperless applications (that were signed on the screen with a digital pen), storyboard presentations, and other productivity items. I joined AGLA shortly after the SmartPad was introduced. It was still getting a fair amount of resistance from older agents, but I LOVED that thing!

Liberty Bankers Life, my primary carrier for both Home Service and Final Expense was one of the first to develop iPad applications, and a couple years later went to phone apps.

As an independent I use multiple carriers, but I gravitate toward carriers that have some version of a paperless application system. The majority of my applications are paperless, either through online e-apps, 3-way phone calls, or simple iPad apps.

On the Home Service side of my business, we're still slightly behind on tech. But I use iPad apps, do my collection reports online, and send collections to the company via ACH draft (from an account specifically set up for deposits of client payments). Plus, I can even take a debit card for payment using an app on my phone or iPad. So even though the Home Service part of my business is still an "old school" delivery method, we're using 21st century tech to get the job done.

5 years from now, I don't see the job itself radically changing for my business in the way it's sold. However, I do see some changes in the market. A big change is coming in the area of lead generation. For now, Direct Mail is still king, but is rapidly becoming a less effective way to reach that demographic. Younger, more tech savvy consumers are aging into that market. They'll have just as much need for the product, but more leads will likely come from online sources, and likely won't be as high in quality. Current attitudes among Millenials, even in the lower income segment, lead me to believe that more of them will attempt to purchase online rather than through an agent. In reality, online purchases are no different than mail order or 1-800-POLICY mills. But this generation seems even more cynical towards "salespeople". Unfortunately, this means they often will end up with an inferior product, IMO, or become confused and do nothing.

Which leads me to #5: I do expect Amazon to enter the life insurance business. I'm not sure it would be a disruptor for the business in general. However, they will most certainly be a disruptor for other online insurance marketers. I hope that they, along with the other online marketers will be reaching and providing coverage for consumers that I'm not likely to reach. In the meantime, I'll keep trying to reach everybody else!

2-4. Since I'm not involved in the "ordinary" side of the business on a daily basis, I'll defer to others' comments on these.