Amid the Covid pandemic still lingering after nearly two years, many industries continue to rethink their business models and customer-based marketing strategies to remain profitable.
The life insurance industry is no exception. A new focus and messaging strategy are helping companies connect with their target markets and address the related changes in consumer behaviour.
A new cohort of customers on the rise
Companies will continue to target millennials for life insurance in 2022. According to Bestliferates, 44% of Millennials overestimate the cost of term life insurance by 5x. Millennials are vulnerable to preconceived notions and ideas that need to be challenged due to a lack of information about life insurance – like types of policies, eligibility criteria, and costs. Life insurance is not usually considered a necessity by many 25-40-year-olds.
By the time of the pandemic, brokers and agents were already improving their digital tools to make it easier for consumers to research and buy life insurance online. Investigating insurance providers, filing applications, and even filing claims can be completed entirely online by the consumer.
To make sure they’re making the right financial decisions, this group of digital-savvy users prefers to research and gather information online and supplement their search with advice from a human professional. Researching and buying nearly everything online is a common practice for millennials.
58% of Millennials don’t buy any life insurance because they don’t know the policy type or coverage amount. It’s time to end insurance industry stereotypes and revolutionize the industry. It’s essential to tailor specific messaging to resonate with this demographic to change their mindset – explaining there are plans for all budgets and price points, even for those with pre-existing conditions.
By educating the public through social media, the insurance industry can dispel many of these myths. In a survey by Best Life Rate, Millennials use social media more than other age groups for research as well as to confirm insurance details, advisors, and agents before moving ahead with purchase: 26% on Facebook, 11% on Instagram, 9% on Twitter, 9% on Linkedin, and 17% on YouTube. Sharing education about costs and options shows transparency and passion for life insurance. Trust in the broker or advisor and company are the factors that increase the likelihood of purchasing life insurance.
In 2022, another impact that Covid is having on the insurance industry will be the growing number of self-employed policy buyers. There are many reasons why many people became self-employed in the past couple of years. Millions of people likely started new companies because they wanted to make a difference. In these circumstances, life insurance is a wise investment for people seeking better opportunities for themselves and their families.
Those who purchase life insurance can secure their family’s future by ensuring that their hard work will continue after their passing. Previously, people based their life insurance coverage decisions on their employment status. Through education, this myth may be dispelled.
Many people do not realize they can still buy life insurance when they leave their jobs. You can still get affordable life insurance coverage if you’re unemployed, self-employed, or working as a freelancer.
Life insurance supports more than people think; it doesn’t have to be just a legacy. A policy can:
- Ensure a smooth-running business without you
- A business debt or real estate linked to your business will not be passed on as a responsibility to your heirs
- Money will be available to fund a buy-sell agreement to help someone buy or sell your business, whether the beneficiary or the partner
Life insurance is essential no matter where people are in their career trajectory. The best life insurance companies will continue to convey this vital message.
Educating & busting myths
Social media is undeniable in 2022. There are multiple platforms to choose from, such as Facebook, Instagram, Twitter, and TikTok. There are also many ways to engage with an audience through text, images, and video.
Here are six ways to gain attention in any medium:
- Curiosity – Are you making these mistakes when researching your life insurance?
- Contrast – How life insurance can ease your stress
- Proof – What business owners do to leave a lasting legacy
- Problem – How to get life insurance without getting overwhelmed
- Promise – How to get the right insurance policy to meet your needs
- Scroll-stoppers – Stop feeling overwhelmed with research!
A successful business leverages social media’s global reach and the attention it can garnish. It takes one piece of content to get noticed. If only 20 people see your post, that could fill up a room. With a social media strategy in place and the right people on a team, this could be a trend that takes a business to the next level.
A Greater Emphasis on Financial Literacy
Including insurance in a retirement or investment portfolio can bridge coverage gaps. The effects of Covid-19 on health and finances were felt by many across the country. Minority communities were disproportionately affected.
Most insurance companies did not adequately explain the importance of life insurance as part of a financial portfolio or retirement fund to this population. In addition, the concept of financial literacy hasn’t historically been targeted at minority communities.
A successful insurance strategy will integrate social responsibility with business commitments and close any coverage gaps. Increased focus on this untapped market will ensure more life insurance coverage for families globally. A successful insurance company will need to segment this market into segments and customize its offerings to the unique needs of these different demographic groups.
A study identified seven long-term strategies for insurers to fuel growth, penetrate underserved market segments, and achieve inclusion.
- Use data and analytics to accelerate underwriting, target marketing efforts, and generate leads
- Develop educational initiatives to strengthen financial literacy across all segments.
- Continue to accelerate innovation and digitalization
- Innovate products and services to offer greater control, simplicity, and flexibility.
Offer integrated financial wellness propositions
- Develop partnerships to collaborate on finding growth opportunities and improving the customer experience
- Diversify advice programs and resources to drive financial inclusion
Considering how to choose the right coverage for each segment will likely first require insurers to understand the demographics most likely to need coverage, their propensity to purchase, their most significant obstacles, and their coverage needs. Insurers should also examine how each group interacts across the life insurance life cycle and their preferences for product features and financial portfolios.
Technology & Digitization
The use of new technologies is enabling companies to reach individuals from multiple demographics with ease. Covid has modernized the insurance industry’s sales process since it impacted its practice of in-person consultations.
In-person meetings are no longer the driving force behind purchasing new insurance products. Today, consumers can buy life insurance plans using their smartphones or laptop.
The use of big data for automated underwriting is also part of this technology trend. The number of people using automated processes has grown from 40% to 70%. Physical examinations are no longer necessary, and policies can be obtained by completing extensive questionnaires. As a result, more people have coverage, and policies are more accurate.
Like so many other industries, the insurance industry has continued to adapt its marketing and selling strategies for 2022 based on lessons learned from the pandemic. Using technology to sell insurance is referred to as insurance technology. It is specifically designed to increase workflows and improve efficiency by providing tools to sell and easy access to multiple carrier products.
There has been an increasing demand for digitization from consumers seeking efficiency, transparency, and personalization. The insurance industry may be traditional, but when the demands get loud, so do the trends. Last is the most important trend to include in an insurance company.
Luckily, digitization doesn’t have to be complicated. Using insurtech companies can cut out the headache of web design and provide a user-friendly interface to ensure anyone can operate a business through an insurtech site.