Shifting Demographics

Changing Tides

How evolving consumer needs are reshaping life insurance

by Matt Berman

Mr. Berman is the President of Foresters Financial™ in the U.S. Visit

Two years living with COVID-19, we continue to observe a fundamental shift in consumer behavior and an increasing demand for instant, frictionless products and services – a trend that’s likely to persist well beyond the pandemic.

Whether it’s same-day delivery, curbside pickup, or how we purchase goods online, most of us – out of sheer necessity – have embraced contactless models and disruptive technologies in the wake of the health crisis. Virtually every business had to, and continues to adjust – some benefiting more than others given the inevitable capital and resource constraints to stay competitive.

The life insurance industry is no different. In fact, it’s an interesting business case demonstrating how carriers and intermediaries embraced a culture of innovation and technology to meet consumer demand at a time when its products and services were needed most. As we look to the future, we see the growing influence of technology having the greatest impact in two areas: rapidly enhancing product distribution, and for consumers, a greater emphasis on delivering value beyond a piece of paper and promise through living benefits.

New Problems Call for New Solutions

At the outset of COVID-19, insurance agents, in a newly found remote world, increasingly pivoted toward non-contact models featuring accelerated or non-medical underwriting. Because accelerated and non-medical underwriting generally eliminates the need to evaluate bodily fluid in the application/underwriting process, agents could effectively serve clients remotely; likewise, their clients would benefit from near-instantaneous, turn-key transactions.

This trend underscores an inflection point in life insurance distribution. Given the spectrum of needs life insurance addresses, the traditional agent model will continue to play a critical role for consumers navigating the sometimes-complex life insurance journey. However, more carriers are also recognizing the changing behavior of consumers who prefer to seek life insurance directly online, or online with the assistance of an agent. In turn, carriers are increasingly beginning to embrace the direct-to-consumer (DTC) or agent-assisted hybrid models that capitalize on instant decisioning technologies. At Foresters Financial, we’ve observed this transformation firsthand, and remain committed to striking the right balance between digital solutions and agent intermediation to ensure we’re aligned with evolving consumer preferences. In a time where income protection, taxed-advantaged savings and estate planning are paramount to a household’s financial plan, families require more options that align to their own changing lifestyles.

Bringing Technology to Life

Technology has been a disruptive catalyst since time began. Today, as consumers gravitate toward turnkey, transactional and more efficient solutions, the pace of this disruption has clearly accelerated. Yet, despite the breakneck pace of innovation, and the perceived value it generates, we question the merit of disruption that falls short of truly improving our everyday lives and, in practice, the overall client experience.

Against the backdrop of rising inflation and interest rates, consumers are becoming more cost-conscious and seek opportunities to stretch their dollar. In life insurance, beyond the underlying principle of low incidence/high consequence asset protection, there’s opportunity to provide additional value to policyholders while they’re living. At Foresters, we believe life insurance should be an investment in the quality of a policyholder’s life. Now more than ever, policyholders deserve a more holistic value proposition, which may include offerings or features far beyond a singular contractual promise, including living benefits that inspire community involvement, assist with financial preparedness, and improve day-to-day wellness.

despite the breakneck pace of innovation, and the perceived value it generates, we question the merit of disruption that falls short of truly improving our everyday lives and, in practice, the overall client experience...

That’s where technology re-emerges into the conversation. Thanks largely to smartphones, IoT and connected health devices, technology has become a ubiquitous fixture in our daily lives. The proliferation of mobile apps has made it commonplace for consumers to download and take advantage of any number of platforms designed to improve their daily lives. This permanent fixture isn’t lost on the life insurance industry, as carriers and intermediaries continue to build the electronic connective tissue that facilitates a more efficient, effective, and profitable ecosystem.

Increasingly, the life insurance industry has placed a greater emphasis on the intersection of technology and living benefits to drive stronger policyholder engagement. The incentives are very clear – in a traditional world, a life insurer engages with a household at two points in the customer journey: at the time of application, or underwriting, and lastly, at the time of claim. In that model, you certainly hope your underwriting and pricing meet your mortality assumptions, and you most certainly miss the future opportunities to address the household’s evolving life stage needs (e.g., home purchase, children, retirement planning). With more emphasis on living benefits and a compelling technology platform to facilitate engagement, the carrier and intermediary increase the probability of sustaining its original underwriting, and more importantly, de-commoditize the industry’s core value proposition. For many, these added living benefits can make a meaningful difference throughout their lives. After all, shouldn’t life insurance be more focused on life than death?

It’s prudent for agents to consider these features as a way to enhance their clients’ experiences and strengthen their own value. Educating consumers on the living benefits of life insurance can be a key differentiator; by showcasing the added features and services, agents can better demonstrate their knowledge and expertise, helping to forge stronger client relationships.

The Road Ahead

The pandemic shed new light on preparing for unforeseen events and we expect robust demand for our products and services in the foreseeable future. Considering these dynamics, insurance agents are presented with a great opportunity to educate consumers on various offerings and highlight the nuances between carriers. It’s critical that agents paint a full picture for clients and assist in their due diligence process to help them make informed decisions.

It’s encouraging to see a resurgence and elevation in the life insurance sector, most notably with the new market entrants embracing digital solutions. However, what isn’t quite so obvious is the innovation taking place across the entire industry, more specifically inside the legacy carriers, which is often on par, or replicated by, the digital platforms. In fact, what’s often lost on people is that legacy carriers are behind many of today’s perceived innovator platforms.

For now, there’s no one-size-fits-all life insurance solution, and there shouldn’t be. While there’s certainly growing interest in DTC models, consumers also see increasing value in the advice provided by agents. By embracing a multi-faceted approach, we’re able to diversify our strategy to help more people attain the coverage they need, regardless of how they’d prefer to purchase a policy. Too many households are underinsured and unprotected. Providing insurance to everyone is our industry’s central objective and duty.

One response to “Changing Tides”

  1. Mark Cherryhomes says:

    Great insight about our industry and the clearer picture of how technology and digital platforms and solutions are becoming a critical necessity for Insurance Companies to stay sharp and be successful.
    I haven’t seen too many articles or publishings that address post-COVID issues for the Insurance Industry.
    Thanks for your sharing!
    Mark Cherryhomes
    Regional Vice President
    Columbus Life Insurance Co.