Since the financial meltdown, the entire insurance industry has been going through a tremendous transformation to become faster, nimbler, and more economical. This means changing the way the industry has always done business to match emerging purchasing processes that clients want, which doesn’t always match up with the traditional insurance sales approach. The rules of life sales are changing and insurers need to address these changes to keep pace in today’s market. Here are three things insurers need to consider:
1. The metamorphosis of the value sale
There was a very interesting article in Bests Review’s November edition titled, “Losing to Win”, where the author, Robert MacDonald, discusses the commoditization of life insurance. Yes, there is more commoditization of specific products, but the value sale has not disappeared. The value sale is not focused on the product itself but on the account. Life agents today need to focus on the holistic needs of the client, not the closing of the individual sale. With the sales tools available, managing the long term relationship with the client has never been more powerful. The value to the client is not in the sale of one particular product but the balancing all of their needs into a portfolio, over time, which meets their long term life needs. That is the new value sale.
2. Life is a purchase, not a sale
No, that’s not a typo. The purchase of any insurance, regardless of whether it’s life or property casualty, is all about finding the client at the right time, when they’re ready to buy. The major difference is that with P/C the windows of opportunity are much more plentiful, around renewals, when a new car or home is purchased, when a business is budgeting for next year or going through a risk management review. With life, the sifting process is much more difficult, finding the newly married couple, new parents or the person who is planning for retirement, to find those clients that are at the right point in time in their life to consider the purchase a life product is the crux of the life sales process. Finding the window of opportunity is the hard part of the life sales process. This is where a finely tuned CRM solution and analytics comes into play. Whether it’s churning through leads purchased, contacts made or existing relationships, the key to turning life insurance into a sale is being able to identify those clients ready for a purchase.
3. Upgrading the care and feeding of distribution channels
Life has always been a tough market with a tough new business process. Insurers are constantly looking to improve the effectiveness of sales channels. This includes, lately, direct sales over the Internet. Critical to success is to allow clients to be able to move seamlessly between channels with a consistent and satisfying experience. Insurers must invest in solutions, this includes CRM, analytics, sales desktops and processes tying sales to underwriting seamlessly, that empower the distribution channels. In particular, insurers need to continue to invest in solutions that raise the game of new agents. The industry is looking to address the “greying” of the workforce and attracting new entrants to the sales ranks is a huge part of this investment. Sales desktops must support real-time analytical engines that provide new agents with recommendations on how to close deals, how to move the sales cycle to the next level and how to develop a winning portfolio for their clients. This is on top of needing to invest the next generation of insurance sales professionals with a deep understanding of the value of the insurance industry. (See The Two Great Truths about Insurance)
The life industry is in a constant state of flux, with the growth in new products, the shift to financial advisory services, changes such as RDR that is expanding in Europe, and shifts in product focus. Insurers that invest wisely and empower their sales channels to not only optimize the channel capability but enable seamless cross channel experience for the client will not only generate more revenue but create successful long-term relationships with both their agents and clients.