A recent study conducted by the Life Office Management Association and their market research firm Gartner identified the impact of digital transformation on the life insurance industry. This isn’t even the most recent or most prominent study that has come out associated with life insurance in recent years. In fact, at the end of August 2017, insurance agents were named as one of the employment opportunities that had experienced a pay increase.
Insurance Agents, Among Others, See Spike in Earning Opportunity
Along with truck drivers and baristas, life insurance agents saw up to a 6% increase in their compensation. This means the market opportunity for becoming a life insurance agent is better than ever.
The LOMA study found that although life insurance in the United States lags behind other product lines for insurance when it comes to digital transformation, sector leaders in information technology are struggling to make an appropriate case for change and innovation.
The good news is that people know they need insurance and are likely more open than ever to talk with an insurance professional about their options. Even though online applications and quoting engines make it simple for consumers to start their search on the web, most people still want to be able to talk to an insurance agent on the phone or in person before selecting the right policy for them.
What Impact Does Adoption of IT Have on Insurance Purchases?
The recent study sought to look at the impact of an IT investment decisions and trends and found that up to 50% of respondents were working at a firm that had no digital life insurance strategy.
Furthermore, many of these firms do not have a clear picture of how digitalization could help to influence their business models. Property and casualty in health are great examples of how digital transformation has been adopted in the insurance industry. However, the life insurance firms, in particular, tend to be more traditional and risk averse.
Information technology leaders working at life insurance companies in North America often underestimate how the trends and technologies could make things easier for them to sell life insurance. The adoption of using the internet for health and life sale management, for example, as well as changes in consumer lifestyle, could make it easier for life insurance companies to target and sell to customers who don’t have any insurance or enough insurance.
What Do Insurance Professionals Think Will Influence the Industry the Most in Coming Years?
According to those who participated in this study, cyber security and security risks will have the biggest influence on the life insurance industry over the course of the next three years. Failing to understand the pace of industry change could be problematic for life insurance companies because they will have to adapt to keep up with consumer insurance and financial needs. An agency-wide digital program should be implemented in order to capitalize on success.
Aging legacy systems were targeted as one of the most problematic aspects of the current life insurance sector. In fact, the Gardner/LOMA study identified that the two biggest challenges over the course of the next three years will be adapting older systems that cannot support new business needs and the modernization of old legacy systems. For insurance agents, it is important to consider that even if the companies you are working directly with do not have a comprehensive digital strategy. Implementing digital mechanisms into your own marketing practice could have significant repercussions in the form of new customers and more at policy sold.
Stay tuned to this blog for further industry news and how you can capitalize on selling and organizational tips to run an effective business as an insurance pro!