Younger consumers, motivated by worries about COVID-19 and the uncertainty of the last 12 months, have been increasingly buying life insurance. According to the The Wall Street Journal, “applications for life insurance policies jumped 4% in 2020 in the U.S., the highest year-over-year annual growth rate since 2001, when MIB Group Inc., a member-owned organization, began tracking activity.” MIB also found that most of the growth in life insurance applications was driven by younger generations. “Applications were up 7.9% for those under age 45, compared with a 3.8% increase for consumers 45 to 59, and a small decline for those 60 and older.” Typically, 70% of applications lead to conversions, according to Andrea Carus, COO of MIB.
Prior to the pandemic, tech-savvy and tech-native shoppers were driving traditional industries to adopt digital tools, creating more user friendly, seamless purchasing opportunities and interactions. The pandemic has accelerated digital even more, across verticals, with life insurance no exception.
The Adoption Of Digital Tools Helps Brands Appeal To Younger Life Insurance Consumers
Many life insurance policies are creating end-to-end digital experiences for the life insurance buying process, from filling out the application to finalizing plan details and signing on the digital dotted line. Lincoln Financial Group is an insurance provider that has actively integrated digital into its life insurance marketing and enrollment strategies and seen results. According to The Wall Street Journal, “Lincoln’s term life applications were up 25% year over year through September for buyers 40 and under.” Lincoln was ahead of the curve, creating an online application platform in 2016. And, the company has since introduced an online interview tool, which eliminated the need for a phone call and can be completed via a secure link. Last year, 40% of Millennial consumers surveyed by Lincoln said they would be more likely to buy life insurance if they could do so completely electronically.
“Digital capabilities are more important than ever as we work to meet the evolving needs of our customers and provide experiences consistent with what consumers are used to from other industries,” said Heather Milligan, SVP, underwriting & new business at Lincoln Financial Group. “The global pandemic has increased awareness around the need for life insurance, and now we have to make sure the process is streamlined and convenient.”
Online Insurance Brands Look For Gains With Younger Consumers In Life Insurance Vertical
Insurance startups and insurtech companies are a growing segment of the insurance industry, with many insiders and investors seeing these online brands as a major part of the future of insurance. According to Statista, “2019 saw the second highest value in insurtech startup investments in the last decade, with a value of over 5.5 billion U.S. dollars.” And, the first half of 2020 saw more than $2.1 billion in investments.
Online insurance brand Lemonade recently added life insurance to its roster of products, which already includes renters insurance and pet insurance. “If you go on Lemonade's website right now, you can apply for and buy term life insurance. It's up and running at this point, just happened. Lemonade has done a great job of bringing their AI, machine learning-driven approach to insurance,” said Matt Frankel, CFP and Fool.com contributor. Like many insurance startups, the Lemonade application process is fully digital and doesn’t require medical exams or lab tests. Lemonade supports its life insurance products in part with content marketing that highlights the brand’s industry expertise.
Fabric, another insurance startup, targets its products, including life insurance, to busy families. Fabric promises that life insurance enrollment, done online or in the Fabric app, is quick, customizable and easy for frazzled parents — a good pitch in a year when parents have been pushed to the limit but still need to plan for the future. “Fabric is a one-stop, future-planning shop [that] lets you buy life insurance and create a will for free in minutes. [Fabric] makes a daunting (and depressing) task feel doable,” explained Kate Rockwood last year in Real Simple.
Fabric offers policies issued by Vantis Life, a Penn Mutual company, an example of a startup and a legacy insurance brand partnering to reach and service younger insurance consumers. A Deloitte survey of 200 insurance leaders, found legacy “carriers continue to struggle to drive more effective connections with consumers accustomed to online shopping and self-service,” and “95% of those surveyed are already accelerating or looking to speed up digital transformation to maintain resilience.” Partnerships between legacy insurance brands and insurtech brands can offer a boost for both businesses.
Digital Helps Insurance Brands Stand Out In A Crowded Market
“The silver lining of the year was that [the pandemic] did help people realize they need to prioritize planning for the worst days as well as the best days,” said Chantel Bonneau, a Northwestern Mutual financial adviser. As people flock to get the coverage they need, life insurance brands need to stand out in a crowded market, particularly as they try to engage finicky insurance shoppers like Millennials. By deploying digital advertising strategies to engage consumers and digital tools that facilitate easier enrollment, insurance brands are more likely to connect with younger consumers eager to find the right life insurance.
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About the AuthorMore Content by Sarah Cavill