As I wrote about in my Sept. 1 blog post, there are four “white space” demographic markets that are vastly underserved by the life insurance industry, in part because traditional marketing methods haven’t done a good job in identifying them and delivering the products and services they need. They are the middle market, the baby boomers, millennials, and small business employees.

Although the insurance industry spends a significant amount of money on brand advertising, we’re still ignoring how these prospects and customers want to be reached. And this is a dangerous game, because today there are many non-traditional competitors that are more effectively engaging them —digital disruptors that are willing and able to deliver what customers want.

The life insurance industry continues to struggle with a distribution system that needs a reboot. Many insurers still rely on third-party distributors, independent agents who “own” the customer relationship, diluting brand good will. Worse, Accenture finds that the insurance sales force is aging and shrinking—the median age for life insurance advisors is 56, and the sales force has steadily declined by about 25 percent over the past 30 years. When an experienced advisor retires, a lot of business migrates–and only 29 percent of advisors have a succession plan.

Changing the Distribution Dynamic: Strategies for increasing the value of distribution in life insurance
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Accenture studies show that although today’s life insurance customers start their insurance shopping online, they still value face-to-face advice when buying—only 16 percent say they would prefer to buy insurance completely online.

These customers want a more individually tailored value proposition. Accenture research finds that these prospects are willing to give carriers access to usage/behavioral data for something in return: to optimize insurance coverage (82 percent), optimize insurance premiums (81 percent), and to receive more personalized products (78 percent).

The needs of today’s customers can be boiled down to five themes: know me, show me you know me, enable me, delight me, and value me.

Next week I’ll discuss the five main attributes that life insurers must adopt to meet these needs.

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