Really? Life sales have changed?

I’ve read a lot of articles lately on how the nature of life insurance sales has changed, and one pointed example is the article in the August issue of Bests Review, “Another Way to Sell”.  In general P/C has always been considered a “purchase” while Life insurance has been considered a “sale”.

Why?  Property casualty insurance is something that people need to have because they’re told they need to have it.  Regulators tell drivers they need auto insurance.  Mortgage companies insist that mortgaged properties have property insurance as part of the mortgage agreement.  Workers comp and similar insurance are dictated by local governments.  Insurers, and agents in particular, don’t need to persuade clients that they need P/C insurance, they just need to convince the client that they are the right insurer/agent to meet the client’s needs.  Of the two sides of the industry, this has always been considered the easier “sell”.

Life is considered a “sale” because technically clients don’t NEED life insurance.  There is no authority forcing anyone to buy it.  The only reason people buy life insurance or an affiliated product is to provide for their loved ones or their own long-term financial security.  The image of the life sale has always been a thick-skinned, never say “die” life sales agent slogging through countless cold calls until the agent can find that one special person  that the agent can convince that a life insurance product is in their best interest.

Aritcles like the one mentioned above take the stance that life insurance is becoming more and more of a purchase instead of a sale.  That there are ready made markets for life insurance out there and selling into these markets isn’t a sales process, but more of a purchase selection process. 

So, how are things different? Honestly, they’re not, and here’s why. 

The image of the thick-skinned life sales agent was earned the hard way.  There would be the occasional warm lead or referral but much of their books were earned by dialing for dollars, incessant networking and always digging for that next chestnut.  Sure, there were always lead lists that the company could provide or purchase, but they often were not goldmines.  It took hard work to winnow down countless “leads” to the fractional number of closed, bound applications

Today, with the use of CRM, marketing analytics, predictive and adaptive analytics, life insurance agents have a much easier path to identifying and leveraging those “ready-made” markets for life insurance.  These markets have always been there but have always been much harder to identify.  In the past, it was done with brute force and human will instead of the high speed, self-learning algorithms that are employed today.  I think the life agent of the 1940’s would weep with joy at the level of customer and prospect data that is available to agents today.  Not that life insurance sales will ever be a slam dunk, but if you can PROACTIVELY identify markets that are in “purchase mode” based upon their demographics, the agent is halfway there to a sale.

Smart agents, and insurers that support them, are investing in:

  • CRM solutions to manage not only client information but their entire lifecycle;
  • Sales Force Automation to proactively help agents manage their sales cycles, prioritize opportunities, plus develop and manage leads;
  • Underwriting solutions – to speed the application process, automate manual processes, uphold underwriting standards and make the insurer easy to do business with;
  • Predictive and adaptive analytics to help agents and underwriters identify upsell and cross-sell opportunities, optimize the customer relationship, improve close rates by making “best practice” recommendations, and by scouring data for new leads and product placement.

Life insurance is still a sale, it’s just that there are better tools than ever out there to help make the life agent (and the life insurer) successful.