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The prevailing customer-unfriendliness of the life insurance application process may be looked at as a disappointment for consumers, but for Haven Life (Boston) it’s an opportunity. The new MassMutual-funded and owned company has debuted its website, which enables customers to buy term life entirely online. In doing so Haven Life embodies two hot trends: industry disruption through technology-driven process improvements, and established insurers acquiring or funding innovative entities.
Haven Life gives the opportunity for consumers to get an instant decision through its online application process. After the user submits an online application, an algorithm determines eligibility for coverage. Once approved, coverage can begin immediately—though users will then need to complete a medical exam within 90 days. The Haven Term policy is currently available in Massachusetts and will roll out to additional states throughout the year.
“It is so frustrating that you can buy everything from your car insurance to tonight’s dinner seamlessly online, but you can’t do the same when it comes to term life insurance,” comments Yaron Ben-Zvi, co-founder and CEO of Haven Life. “With Haven Life and the Haven Term policy, we’ve created a model that cuts out the complexity and brings the life insurance industry in line with consumer’s on-demand lifestyles. Never before have consumers had the ability to confidently find out how much coverage they need and what it will cost them. They can then make an informed purchase on quality term life insurance at the click of the button- and, entirely online.”
Haven Life’s approach was shaped by a study on U.S. consumer attitudes about life insurance the company commissioned U.K.-based market researcher YouGov to conduct. The survey found that 78 percent of Americans believed that life insurance could be bought online—reflecting how insurers’ capabilities lag behind consumers’ assumptions about how business is done, even in the insurance industry.
“Haven Life’s findings emphasize the need for the life insurance industry as a whole to make the experience better for the consumer and to truly empower them to make a confident and convenient decision,” says Gareth Ross, SVP, Advanced Analytics and Data Science, U.S. Insurance Group, MassMutual. “We need to adapt and ultimately resonate with buyers who are intimidated by the process.”
Haven Life seeks to achieve that resonance with a suite of tools and features on its website designed to anticipate consumers’ questions and address their concerns in a user-friendly manner:
Life Insurance Calculator: Haven Life’s proprietary life insurance calculator determines how much coverage is needed with fewer questions and in a more straightforward than most online calculators.
Competitive Price Comparisons: After determining how much coverage is needed, Haven Life offers price comparisons for Haven Term and policies from other top-rated insurers. Shoppers who choose to go with another provider are directed to the insurer’s typical application process. This structure is designed to give users of the site complete transparency and control over choosing which policy is best for their life situation, Haven Life says.
Plain Language Policy: Haven Term takes the position that users benefit from a plain language policy that makes it easier to read and understand their coverage
Receive a Decision and Start Coverage Immediately: Unlike the typical life insurance purchasing process that can take four to six weeks to get underwritten, Haven Life users who select the Haven Term policy receive an immediate decision on their application and coverage can begin that day, though users will subsequently have to have the medical exam mentioned above.
Customer Service: Haven Life seeks to avoid the all-to-common problem of self-service equating to bad service. The company says that help is available for applicants during business hours via phone and live chat.
Insurance carriers have every incentive to create innovative capabilities such as those assembled by Haven, and some of the most prominent have made notable advances toward meeting changing consumer expectations. Examples include the intuitive tools of Prudential’s Incomecertainty.com site, or Principal Financial’s data-driven underwriting, which reduces the life insurance underwriting process to within 48 hours without physical examinations and lab work.
However, many insurers are going the route of MassMutual in this case, funding and/or acquiring dynamic start-ups to provide innovative capabilities. Accenture’s 2014 Digital Innovation Survey found that 43 percent of respondents were planning or have completed the acquisition of start-ups or innovative competitors to help them extend their value chains and better position themselves in the digital world. Accenture found that 82 percent of carriers expect their peers to make such acquisitions, primarily of new digital insurance start-ups (59 percent) and companies specializing in telematics (47 percent). Other expected acquisition targets, according to Accenture, include aggregators (43 percent) and analytics companies (38 percent).