Similar to the aging population discussed in my last blog post, the middle market is ripe to return growth for insurers that pursue it strategically.
Life insurers know the potential of the middle market—some 52 million US households with annual incomes of $35,000 to $100,000. Still, only 46 percent of middle-market consumers own individual life insurance, according to a LIMRA study. Such a protection gap indicates untapped premium potential for the segment of $10 to $50 billion, based on Accenture analysis.
Carriers will need to act differently to capitalize on the substantial opportunity in this segment. Particularly:
- Create a simple portfolio of life and voluntary benefits products with lower price points to attract the segment at the worksite, taking advantage of a captive audience, simplified underwriting and lower distribution costs.
- Digitize direct channels to achieve scale, drawing on consumer marketing to transform traditional sales and promotions while expanding the breadth of products offered through digital platforms on private exchanges.
- Simplify underwriting and pricing processes, using an intuitive and seamless sales and service platform (including set-up and billing) and possibly adopting a new business model that eliminates constraints of legacy infrastructure, systems and processes.
In my next blog, I will offer ideas for tapping growth in the millennials segment.