Trends in the Marketing and Distribution of Life Insurance.

Author:Root, Jeff
Position::[GUEST ARTICLE]
 
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* InsureTech has been around for years with 100s of millions of dollars being pumped into these technology companies and there hasn't been a dent in life insurance distribution.

Life insurance companies are so focused on short term sales targets, that it's stunting long term innovation. They're are not adopting technology as fast as vendors are building it and they're certainly not building products as fast as markets are being developed.

As a BGA on the front lines of the digital life insurance agent movement, we believe it's going to be a while before there's any big changes to life insurance distribution.

WHAT'S HAPPENING NOW

Innovation is happening through APIs. In other words, connecting systems together.

It's not the life insurance companies innovating, they're simply connecting with other technologies.

Even with these connections, there hasn't been any big innovations to life insurance distribution because of new technologies.

Life insurance companies are slowly adopting tech. When they do adopt tech, it takes them some time to get it right.

Take LexisNexis for example - an integration being adopted by many life insurance companies. We thought this would speed up the underwriting process, but it really just added another layer to underwriting and didn't really cut any underwriting time out. When carriers initially do integrate, they have to work on tightening/loosening up their LexisNexis underwriting and it takes some time to get it right. This leaves the agents in the field getting inconsistent declines/approvals.

All this to say, even with carriers adopting new technology - they're still learning how to use it.

On the distribution side of things, we're seeing a consolidation industry-wide. There are a declining number of life insurance companies, a declining number of BGA's and a declining number of agents.

To many that are on the distribution side of the life insurance industry, it appears that some disruption in life insurance is happening based on these facts, but correlation does not imply causation.

IS LIFE INSURANCE DISTRIBUTION FEELING ANY DISRUPTION?

No.

Beyond more consumers researching online and buying over the phone, there really hasn't been any life insurance disruption when it comes to distribution.

We hear about all this funding for direct to consumer life insurance startups that are going to simplify the way life insurance is purchased.

For the most part, these companies are:

(1) Partnering with a life insurance...

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