The life insurance market has been on somewhat of a rollercoaster ride for the past three years. From pandemic fears driving sales up to recession fears causing steep declines, producers in the life insurance space have scrambled to keep up with emerging challenges and yo-yoing demand.
While the future of life insurance sales is unknown, early market predictions hint at steady growth over the next couple of years, driven by the next generation of insurance consumers and an increased demand for health-related workplace benefits. These factors put agencies in a good position to use life insurance sales for greater profitability and growth. But, with the talent crisis cutting the number of producers available to meet new demand, and the growing popularity of apps that allow policyholders to buy life insurance products without the need for human interaction, the producers who remain will likely feel the pressure.
Fewer producers to address a growing market
If you work in the insurance industry, or happen to have read our blog, you’ve probably heard of this little thing called the talent crisis. The issue stems from the large number of insurance professionals reaching retirement age and the lack of talent available (and interested) in filling the gaps they’re leaving behind.
Data from the U.S. Chamber of Commerce confirms the extent of the situation, predicting the insurance industry will see over 400,000 open positions left unfilled in the next 15 years. With fewer producers available to advise and sell to a growing population of life insurance buyers, producers who do stay in the game have the task of finding creative ways to manage new clients. They also have the challenge of competing with tech-first carriers with mobile apps that sell life insurance directly to consumers.
Appealing to a new generation of buyers
As Generation Z transitions into adulthood, we can expect to see an effect on life insurance sales, but the new generation of insurance consumers will need some convincing. While this demographic’s interest in purchasing life insurance products is at an all time high, financial stressors and an overall lack of understanding are preventing many individuals from actually purchasing a policy.
Producers play a critical role in shaping the way the new generation thinks about their life insurance policies. But, understanding what it is they want out of their insurance agent and policies will be a crucial first step in attracting and retaining these new customers and ultimately building your agency’s long term business.
Personalization is key
Life isn’t one size fits all, so why should insurance be? Gen Z is particularly interested in agents who can offer personalized services and products to fit their specific needs. For example, while some consumers still prefer typical sit-down meetings with their insurance agent, others might be in need of a more on-the-go method of communication.
And you can forget those mass emails detailing products a consumer might be interested in. The younger generation is more interested in an agent who’ll recommend and educate them on the policies that are most relevant to their current stage of life. Listen to potential clients and educate them on the different types of life insurance products that best fit their personal needs.
Types of life insurance Gen Z may look for
Term life insurance is the simplest life insurance policy option, so it might be a good option for the Gen Z client who’sjust begun a career and is looking to start planning for their life and future family.
Whole life insurance allows policyholders to build equity. This might be a better option for your older, more established clients who are less focused on building savings and starting a family, and more interested in investment growth opportunities.
Universal life insurance offers more flexibility which can be appealing for a wide variety of people. If your client is in a position where they may need to change things like their death benefit or premium over the life of their policy, a universal life insurance policy would be a good recommendation.
Annuities, although not strictly life insurance policies, can offer some of the same benefits. They also range from low-cost and guaranteed to expensive and highly complex. By building a relationship with your clients and keeping tabs on them as they navigate major life changes like a career change or starting a family, you can help them decide which annuity might be best for them and when.
The way you talk to each of your clients about life insurance products should vary based on their current situation. For example, a young family with two working parents is going to have different needs than a single individual starting a new job while trying to pay off a hefty student debt. Whatever their specific situation, your younger clients will particularly appreciate the time you take to customize your guidance to their situations.
If there’s one thing we can thank the pandemic for, it’s the technological revolution it spurred in many industries, including insurance. And with the “digital generation” making up a significant portion of new market demand, agencies will need to show that their tech stack stacks up if they want a shot at gaining new, young business.
Agencies can appeal to new clients by offering a positive digital experience. Streamlining the customer experience with digital channels for communication, digital tools for outreach and engagement, and virtual claims handling can increase customer satisfaction and reduce churn.
Remember that embracing technology at your agency is just the first step. It’s just as important that the carriers you work with provide clients with modern, digital solutions that make getting approved and managing their policies easier and more convenient. The younger generation is more comfortable sharing personal data if it means they’ll receive more personalized care. Carriers with the ability to offer online applications and products priced based on customer data might appeal more to the modern consumer than those that can only offer a more standard range of products.
Spend less time on administrative work
Keeping up with new demand while also providing the level of personalization and customer experience the new generation of buyers is looking for could prove challenging for producers. Especially when they’re too bogged down with administrative tasks to provide the level of attention their clients want and deserve.
Think of the hours your producers spend managing their many state license and carrier appointments and tracking things like continuing education credits and renewal deadlines by hand. All the while, they’re wasting time they could be spending t on more valuable tasks like calling new leads, or strengthening current client relationships.
Not only does automation give your producers back the time they need for more valuable work, it also helps eliminate the human error commonly associated with manually completing administrative tasks. With fewer producers, your agency may already be feeling overburdened and understaffed. When a producer is doing the job of three people, there’s a higher possibility they’ll make a mistake or miss a deadline, which could end up costing your agency more than you’d think.
Not to mention the other cost savings automation can have! Like helping you stay on top of license renewals to avoid expensive compliance violations and optimizing producer onboarding to reduce recruiting costs. Adding automation into your producer licensing and compliance management process can enable your producers to meet the demand of the new generation and reach new levels of efficiency, productivity, growth, and profitability. See how, with AgentSync.