Life insurance is a very different space to navigate, compared to ten years ago. People now spend most of their lives online.
More people opt for video calls instead of in-person consultations, and browse websites, insurance comparison platforms and social media to get information. New policies are even being initiated via WhatsApp, digital signatures for counteroffer letters are now commonplace, and tele-underwriting has become more regular.
However, digital technologies are only relevant to the extent that they are supporting your ability to deliver on your purpose, which is to add value to people’s lives by helping them navigate life insurance products.
The nature and scope of the products
Recent data shows that people are seeking out advice more than ever. According to ReMark’s Annual Global Consumer Study for 2020, 42.2% of insurance clients said that they trusted automated services less than human advice. This is up significantly from 33.5% in 2019. For most people, having someone to think with, who can help them figure out what matters most to them, to work through financial complexity with them, and to provide them with some certainty, is more necessary than ever.
However, research has also indicated that there seems to be a trust deficit between advisers and consumers. People’s finances are more under pressure now than ever before, and many consumers feel they have been let down by both private and public
The 2019 Edelman Trust Barometer indicated that financial services remains the least-trusted sector at just 57% trust among the general population. And, this was before COVID-19. Despite advisers’ and product providers’ best effor ts, many clients often reluctantly pay premiums without comprehending the nature and the scope of the products they sign up for.
What needs premiums are covering
To help close this trust deficit it is key that you, as an adviser, can show clients in real terms what needs are covered by their life insurance, and for how much. For example, for Income Protection, you can allocate what clients spend on their household needs, childcare needs, and healthcare needs and what amount they would need to have protected. In the case of cover for a severe ilIness or injury, you can look at what they will recover from, what is permanent and what is covered by death. Using someone’s budget makes the situation quite real.
Approaching the process from an income protection perspective, rather than looking at a specific amount of cover, is a good way to highlight to clients what needs their premiums are covering.
Clients are far more receptive when they understand how you got to these numbers and it is more likely that they will buy cover and keep it, as the importance of this insurance is more evident. This is very much a co-creation process, where you and your client are crafting a policy together, based on their specific needs and that suits them as an individual. This is needs-matched cover at its best.
The real ‘why’ of insurance
Insurers need to support financial advisers with user-friendly , informativ e interfaces that allow them to access information, explain products and run quotes. There needs to be enough intelligence in the background to support the advice process, while at the same time, facilitating client interaction and participation. Simply put, we as product providers need to give you the tools to highlight the ‘why’ of insurance.
An example here is an online quoting application. The platform would enable you, the adviser, to co-create an individualised, needs-matched insurance solution on-screen, with the client viewing and inputting on the quote generation process. Using this type of quoting platform will facilitate your ability to genuinely interact with clients, shedding light on the complex terms and conditions that sometimes tend to alienate consumers.
This is what forms the basis of a solid relationship with clients and puts you in a good position to gain your clients’ trust and recommend products that tick all the boxes that matter most. And that is the real ‘why’ of insurance – to add value to people’s lives and cover them and their families.
This article first appeared on page 52 of the FAnews October 2021 magazine and is attributed to Sean Hanlon, BrightRock Executive Director