The life insurance sector has notably stagnated in the past few years. The revenue from life insurance premiums has yo-yoed from $145.1 billion (2018) to $151 billion (2019) to $143.1 billion (2020) to $159.5 billion (2021), and so on. Such an inconsistent up-down trend comes in the face of fluctuating macroeconomic conditions, an inevitable pandemic-driven market volatility, and competition from other financial products.
Moving through a cash-strapped environment, insurers have no other alternative than to acquire new businesses by improving the identification of target markets, enhancing personalization in outreach methodologies, and developing personalized products aligned with customers’ specific requirements, including niche offerings, to maintain financial stability. However, boosting policy sales and renewals will take a lot more than just strategic marketing. Businesses will have to assume a brand position hinging on digital transformation to transfer trust, control, and convenience to the policyholder’s fingertips – the triumvirate of rewarding customer experiences. Such an endeavor will bear fruit with the introduction of a life insurance management system.
Challenges in New Business Acquisition and Their Practical Solutions
To understand how insurers can leverage life insurance software to gain new business, one first has to understand the challenges coming in the way. Here is a breakdown of the common roadblocks, along with their possible solutions:
1. Limited Product Categories
No doubt, the term “life insurance” itself sounds restrictive. It is a highly nuanced field of insurance that enjoys little to no room for insurers to innovate or differentiate products and services. The templatization of life insurance makes it difficult for companies to acquire new business.
Life insurers can embrace new product categories in the form of:
- Term life insurance
- Whole life insurance
- Universal life insurance
- Variable life insurance
- Burial insurance
Such product diversification allows insurers to cater to a wider clientele with varying requirements. As far as managing such life insurance products is concerned, investing in the top life insurance policy administration system would offer a centralized platform to personalize and administer such life insurance policies.
2. Lack of Policy Personalization
When the meaning of life changes from individual to individual, how can life insurance mean the same to everybody? Different policyholders will have different expectations from their life insurance policy and would be hesitant to commit if the policy does not conform to their needs.
Policy personalization starts with collecting customer data. Fortunately, insurers are sitting on a wealth of first-party data that can dictate product personalization. With the right life insurance underwriting software, it will be easier to introduce such adjustments to satisfy policyholder requirements. In fact, insurers can make use of life insurance quoting software to match a prospect’s budget and spending capacity to win their business!
Enhance Customer Experience With Data Integration
3. Missed Opportunities To Cross-Sell and Up-Sell Insurance Products
Unfortunately, life insurance is plagued with an array of missed opportunities. It can be in the form of cookie-cutter policies, limited product or service suites, or even policy-related complexities. It causes significant revenue loss as most opportunities stay unrealized.
Personalization is the silver bullet to capitalize on every possible revenue opportunity. Insurers can utilize Life Insurance Software to capture and process customer insights like their demographic, behavioral, and psychographic data. Such an in-depth understanding of customer preferences will grant them an advantage to not only curate policies that speak to the general masses but also cross-sell and upsell to existing policyholders! This two-hold approach will increase revenue.
4. Geographics Limitations
Most life insurers are limited by geographical boundaries. Even if someone were to venture out into the global playfield, the inhibition of legal or regulatory run-ins can dissuade such ambitions.
Top life insurance policy administration systems allow insurers to expand into different states and geographies to penetrate new markets. It also unlocks the potential to enter the uninsured sector to maximize revenue. At the same time, digital life insurance solutions are developed with an eye for compliance, regardless of geographies, which makes it easier to expand without splitting hair over compliance.
The Core Components of a Modern Life Insurance Management System That Support New Business Acquisition
Clearly, life insurance software systems are breathing a new life into the industry vertical and can transform the life insurance lifecycle. However, one can only translate the challenges into opportunities provided that the platform comes equipped with the following features and functionalities:
- Singular Dashboard
When it comes to product innovation, companies should seek out ways to make such products manageable. A single dashboard will make policy management and administration easier to drive conversions faster.
- Data Analytics
Data plays a critical role in governing policy personalization or smart marketing techniques. As such, advanced insurance data analytics tools are a must-have since they act as a window into the customer’s mind.
While acquiring new business is definitely a tried-and-tested method to increase revenue, automation can widen profit margins by reducing operational and administrative costs. At the same time, it enhances customer experience, which acts as a new business magnet.
Mobility makes life insurance more accessible to agents and customers alike. Whether it is addressing an insurance sales objection or paying premiums, life insurers that offer cross-device, cross-platform accessibility will always stay a step ahead.
- Lead Scoring
Lead scoring allows life insurers to prioritize leads on the basis of the likelihood of conversion. Such a strategic approach enables resource optimization as agents invest their time and effort proportionately for higher success rates.
- Omnichannel Support
A seamless, omnichannel customer support experience is crucial to new business acquisition as customers are 94% more likely to repurchase the product or service. Plus, there is an 88% probability of an increase in such spending.
The Way Ahead
A life insurance management system could be a much-needed catalyst to get your business out of a slump. It can tap into revenue streams by allowing product diversification, policy personalization, and borderless insurance. At the same time, it overcomes compliance concerns, inefficient use of resources, and lack of customer-centricity. In short, it is a multi-dimensional solution to maximize revenue by acquiring businesses old and new.
Case in Focus
A leading insurer was struggling to stay ahead of the competition through disparate legacy systems that were difficult to maintain. Further, the absence of a consolidated system harmed the customer experience. We created a customized, and unified platform, powered by InsuranceNXT, to help the insurer consolidate different core systems and gain a unified view of the customers. As a result, the customer was able to improve the revenue by unlocking more cross-selling and upselling opportunities and reducing maintenance and licensing costs. For more details, refer to the complete case study.