Technology has been pivotal in transforming the life insurance sector for decades – and adapting to those changes has been key to survival.
Now that our industry is undergoing another major digital and technological transformation, agencies and advisors must once again adapt their processes. And with more investment going into direct-to-consumer insurtech, it’s more important than ever for advisors to embrace a tech-driven market.
To learn more about insurance technology in the past, present and future, we interviewed Marc Schwartz, Principal at Windsor Insurance, a marketing organization that provides sales, marketing and underwriting expertise to assist agents in selling life insurance products to high-net-worth clients. A long-time industry vet and now an investor in the life insurtech field, Marc shared his insights on how life insurance technology has progressed and what advisors need to do to compete today.
Q. You’ve been in the industry for some time. From your perspective, what are some of the biggest changes over the decades?
A. The two major trends I’ve seen over time were, one, improved ways of communication and, two, operational changes that allowed for greater accuracy and scope of work.
In terms of communication, the first big change I witnessed was the mass adoption of the fax machine. It was the first time information and documents could be passed within minutes rather than days. Then came the biggest shift – email. Not only did email allow for essentially instant communication, but it also gave us the ability for both one-to-one and one-to-many correspondence. With the introduction of email, the industry began transitioning from entirely paper-based to more digital.
From an operational standpoint, the relational database emerged in the '80s. The ability to take what was once the domain of massive companies that developed the original IBMs and scale it to smaller companies like Windsor was huge. Companies could put together a true relational database to store information, generate reports and do calculations with speed and accuracy. The new advances in data collection, as well as visualization technology, gave life insurance salespeople the ability to better illustrate the life insurance product to potential clients.
Q. What technologies do you see life insurance advisors using to communicate with clients?
A. Email is definitely still the dominant form of communication. Text messaging has also become very popular, but we haven’t seen it adopted from a compliance perspective as an official form of communication. However, email does come with its challenges too. Everyone is supposed to use secure email to protect a client’s PII, but there is no single platform, and the platforms available are not client-friendly. Further, consumers don’t have access to secure email, so they send items to advisors via regular, unsecure email.
Q. Looking at your business today, could you name the one or two technologies that you just can’t imagine living without?
A. It all comes down to mobile for me. With my smartphone, I can communicate by text, phone or email; access documents stored in a cloud environment; and even look at databases that are now built on a mobile platform. To me, the accessibility and efficiency of mobile technology is the number one thing I couldn’t live without.
Q. What new technology are you seeing emerge in the insurance industry?
A. As an investor in an insurtech startup, it’s really exciting to see what’s changing in life insurance and being part of that change.
In my experience, most of the investment money is going into the direct-to-consumer side. There are a lot of players, both carriers and outside players, trying to build their own technology to speed up the acquisition process in a multi-carrier facet. This includes technology like automated underwriting programs that use machine learning and AI to fulfill that process more quickly.
Q. With so much investment going into direct-to-consumer insurtech, what can advisors do to stay relevant today?
Advisors have to adopt new technologies and processes if they want to improve their business. It’s critical that advisors are able to execute business faster and speed up processes. That may mean only focusing on a few carriers and learning their platforms really well.
I think advisors should also look into adding more consumer-friendly data visualizations into their sales processes. Tech companies have created tools that allow you to communicate with customers about the value of life insurance using personalized presentations, and that’s very powerful.
More generally, I would say there needs to be a mindset shift among advisors as machine learning and algorithmic models take over the work of underwriting. Traditionally, underwriting expertise has been a major selling point for agents. Now, you’ve got this dichotomy where you have to adopt these technologies, but then it forces you to view yourself differently. Rather than an underwriting expert, it may be time for advisors to see themselves as asset gatherers or gatherers of people. And with COVID-19 altering how we do business, the need to shift gears and adopt new technology is even more urgent.
It’s time for advisors – and the life insurance sector as a whole – to adapt to a digital environment and provide greater speed, accessibility and flexibility to clients.
To learn more about technology trends, read our blog, “Life Insurance Trends 2020.”
Marc Schwartz has almost 30 years of experience in the US life insurance industry, including as a Principal of NFP Windsor Insurance Associates
Marc LinkedIn: https://www.linkedin.com/in/marc-schwartz-1269031/