To quote Bob Dylan…the times, they a changing. And the life insurance industry is not immune to these changes. In fact, the industry is on the brink of significant change, driven by several disruptive forces. As an advisor, it is important that you not only understand these changes, but embrace them in your business and when dealing with clients.
First…Understanding disruption
Disruption in our world has reshaped many industries, from music to retail. You don’t have to go too far back to remember browsing in your local record store or having to visit multiple stores to get the items you need. Today your music is downloaded to your phone and everything you want can be found online, often on one website. Think about how companies like Google, Amazon, Netflix, and Tesla have revolutionized their respective fields. While the life insurance industry has been slow to adapt to change, there are disruptive forces at work all the time and by adapting to change, you can provide a better experience for your clients.
Forces disrupting the life insurance industry
Several factors are driving disruption in the insurance sector:
- Demographics: Changing population dynamics.
- Customer experience: Increasing expectations for seamless and customized interactions.
- Technology: Rapid advancements in digital tools and platforms.
- Regulation: Evolving regulatory landscapes.
Where are we now?
Life insurance ownership in Canada remains low. A recent LIMRA recent study revealed that only 56% of respondents hold at least one life insurance policy, and 48% believe they lack adequate coverage. That means that the total life insurance needs gap (people who either have no insurance or are underinsured) now encompasses over 8 million adults in Canada!1
What’s going on?
The traditional approach to selling life insurance, which relied heavily on human interaction and primarily targeted high-net-worth individuals, has left many potential customers underserved. Particularly, households earning under $50,000 per year, Millennials, Gen Z, and women have been largely ignored. Couple that with the fact that traditionally life insurance was sold to customers, not bought by customers, it was always dependent on human interaction, often with many touch points before the sale was made. But, as you have probably noticed, human interaction has taken a back seat to digital interaction in many areas of our lives. This change may have happened slowly, but the insurance industry was even slower to adapt leaving a big gap in insurance ownership in Canada.
The need for change
The life insurance industry is ripe for disruption. Canada has a large underserved market and significant dissatisfaction with the way insurance has traditionally been sold. Consumers, especially younger generations, lack knowledge about life insurance, with many unsure about how much they need or where to get information, and almost half of Canadians surveyed think that it is too expensive.
There is a clear lack of understanding about insurance including how to buy it, where to buy it, and how much to buy. By embracing the forces that are disrupting the industry – demographics, customer experience, technology and regulation, you can meet your customers where they are today and provide the kind of experience they want when it comes to insurance protection.
In our article, The world of digital innovation, you will learn how ivari can help you embrace these changes and provide a better experience for your clients.
References
- LIMRA, 2023 Canadian Insurance Barometer Study
Disclaimer
This article is intended for general information purposes only and should not be considered specific advice, nor is it a substitute for advice from a qualified professional. The article may contain information obtained from third-party sources. While reasonable efforts have been made at the time of publication to ensure that the contents of this article have been derived from reliable and accurate sources, including third party sources, ivari provides the information “as is” and ivari does not warrant the accuracy or completeness of the information contained herein.
Neither ivari nor its affiliates, officers, employees or any other person accepts any liability whatsoever for any direct, indirect or consequential loss arising from any use or reliance on the information or opinions contained herein.
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