Time to modernize life insurance

It happened to record labels, it happened to airlines and now it needs to happen to our industry

In an age where everything is touchscreen, typable and time sensitive, new technology arises quickly to distrupt traditional methods of pretty much everything. Those industries stuck in the old-fashioned habits of paper and pen are having to adapt - and quickly.
Life insurance is no different. With an average underwriting time of 42-47 days, the process of purchasing life insurance is far too slow for today’s internet-enabled consumers. With 95% of Canadians online and few companies offering an online purchase option, the lengthy paper process could be one of the reasons the number of policies purchased each year in Canada is rapidly declining.
While many people in their late twenties aren’t ready to consider a family, a mortgage or even shaving, life insurance does not rank high on their priority list. However, as the looming 3-0 arrives, and with that a growing sense of ‘getting older,’ Millennials will eventually look to invest in such necessary policies. However, when they do they will find the process stuck in the noughties where paperwork, medical testing and the mailbox were the norm.
According to study by Limra, an insurance research and consulting firm, the majority of millennials recognise that they will need life insurance eventually but only 11 percent of those between 18 and 34 years old said they were likely to buy it. One reason could be because it isn’t a quick and easy process.
One participant said: “Make it easier to get information online. Make it easier to get a quote and buy [online]. It’s nearly impossible now.”
If providers want to generate new business and keep up with millennials it seems that online calculators, easy pay options and fast-quote functions are the way to go. The underwriting time needs to be diminished from that 6week period to less than 60 minutes.
However, it seems many of the biggest commercial insurers have yet to pick up on this trick with many too focused on their sales process. While there’s no denying that customers do like to interact with a real person, in this fast-paced world the ability to fire off a quick email and instant query is mandatory.
This means that it is potentially time for brokerages to capitalise on this missing digi-market and lead the way in faster, web-friendly policy processes. With Google Trends reporting that there are approximately 100,000 relevant searches related to "life insurance" every year in Canada, there is clearly a web market to capitalise on that could boost those declining policy numbers.
Consumers may be more likely to purchase an online policy if the process is quicker and easier than purchasing one ‘old school’ with a larger company.
Companies like Teachers Life and US company Haven Life are leading the way in this and have developed phone friendly applications and digital platforms that underwrite within 15 minutes.
Speaking at the time Haven Life’s new technology was released, Gareth Ross, SVP, Advanced Analytics and Data Science, U.S. Insurance Group, MassMutual said: "A technology focused, streamlined solution for purchasing life insurance was overdue for consumers.”