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.
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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.â€
per Bloomberg
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.
