Life insurance is, or should be, an essential element in most household’s financial planning. Yet life insurance sales in the US have steadily declined for years—due in large part to today’s low rate of household formation, lack of available funds within households and consumer fears of outliving ones’ resources. Rather than trying to figure out how to sell their existing products, insurers should look to create new sales engagement models that focus on customers’ real needs.
My colleague, Patrick Lyons, and I explore “How Life Insurers Can Bring Their Business Into the 21st Century” in a recent Harvard Business Review online article. In the article, we argue that in order to remain, or become, a relevant investment vehicle, life insurers must shift from a product-selling focus to a needs-based, solution-selling approach. This approach must recognize that client protection, investment, and retirement needs vary across life stages and demographics—and that technology has changed the way consumers buy life insurance.
In our article, we offer four key ways life insurers can modernize their products, services, and marketing efforts to remain relevant and reverse declining sales trends:
- Understand the customer, discovering and delivering what s/he really wants rather than letting the assumptions attached to existing products limit how they explore and define customer needs.
- Develop customer-oriented offerings based on real customer needs.
- Provide a better customer experience, thinking in terms of customer relationship versus an “event” purchase.
- Increase efficiency by automating workflow and decision support for immediate customer responses.
Life insurers cannot do much about the rapidly changing demographics and composition of US households. However, they can become more relevant and engaging to customers by reinventing their offerings as “living services” as opposed to just “life insurance.” By harnessing innovative technologies and developing new approaches, they can shift their declining sales and once again start to grow. Read the article here.