Building Effective Digital Customer Acquisition in Life & Annuities

Companies taking on the challenge to modernize the means by which they engage with consumers can issue policies faster, cheaper and build long-term relationships with a more profitable customer base.

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For more than a decade, you’ve heard that the life insurance industry is in the throes of massive change—overhead costs are too high, and agents are aging out of the workforce, with a limited pipeline of talent to fill the void. Also, consumers are becoming more autonomous in their buying decisions, demanding to quickly compare and purchase products through the channels most convenient to them.

Life insurers know that they must augment their “feet-on-the-street” customer acquisition model with a more agile, digital strategy. Yet, time and time again, those efforts have fallen short. Some carriers have limited their use of digital means to target prospects or accepted applications online—while leaving much else in the process unchanged. Customer experience has remained impersonal and generic. Competitively priced underwriting still took 30 days, and the middle and back offices continued in a business-as-usual mode.

To adapt to the emerging world, insurers must develop an effective digital customer acquisition system that impacts targeting, onboarding and final decision making.

Digital Platform, Defined

Before looking at how customer acquisition works through an end-to-end digital platform, it’s important to identify how digital technology differs from legacy systems and approaches. A true digital platform is conceived from beginning to end from a digital perspective, with a data-oriented marketing capability and an independent underwriting engine that allows carriers to continually learn from gathered data.

Applying design thinking to understand the customer would mean, for example, if a company asks five questions about asthma, but the data shows it only takes three of those questions to adequately assess risk, the underwriting guidelines need to be reviewed to speed up the process. By constantly gathering and analyzing data, carriers can continually refine their models and pricing rules, translate customer insights into experiments, and bring in agile execution to increase straight-through processing.

What the Acquisition Journey Looks Like in the Digital World

With the capability to apply analytics at every interaction throughout the customer acquisition process, carriers can give consumers a more personalized experience and improve the efficiency of their own operations.

Targeting: Applying Analytics for More Effective Customer Engagement

Currently, most life insurance companies rely heavily on captive agents and intermediaries, using digital technology to funnel leads to their sales teams. Expansion means adding more intermediaries in those targeted areas—an increasingly difficult task as the workforce shrinks. Even with a leads funnel, the traditional sale is a numbers game. Agents have to sift through a lot of prospects to find the individuals who both have the desire to purchase life insurance and meet the risk profile sought by the carrier.

A digital customer acquisition strategy transforms that approach to make it more efficient and targeted. Carriers can now apply analytics to build a model of their ideal customer to micro segments based on risk tolerance, demographics, location and projected lifetime value. This detailed prospect information enables carriers to design targeted, direct-response marketing campaigns. Clean, relevant marketing messages are created for each micro segment, and delivered through digital and other media the segment is more likely to use. Lastly, performance is measured, and those messages are fine-tuned to increase response and to drive closure.

Digital Customer Onboarding: Enhancing the Customer Experience

So, we’ve targeted prospects that fit our analytic model, and reached out to them through appropriate digital channels with relevant messaging for each micro segment.

Let’s say one of those prospects clicks on a banner ad and is taken to the carrier web site. What happens next? As soon as that prospect accesses the site, he or she is staged within the system. After getting basic information, the workflow engine determines what the next step of the journey should be, based on predetermined rules. Based on the consumer’s age and zip code, the system can predict the kind of insurance the consumer might be looking for and customize the next screen based on that information—with messaging created specifically for that micro segment.

Streamlined Decisioning: Reducing Month-long Processes to Minutes

Based on the data collected and documentation pulled, the digital platform uses predictive, real-time analytics to determine the specific workflow for that individual.

For example, if the data indicates that the prospect fits a specific, low-risk profile and does not require additional medical exams, he or she advances to straight through processing. The consumer is offered a specific product or products, makes a selection, signs the document electronically, pays and is issued a policy in minutes, without human intervention.

If the data shows that the prospect is a higher risk, requires medical exams, or appears to be gaming the system, that individual receives a message stating that a representative will be in contact. Then, that application and supporting data is forwarded to the appropriate staff member for further vetting or to schedule any required medical tests. The number of workflows and situations depend on each individual carrier’s guidelines, preferences and state rules.

Again, the targeting process, the workflow process, and the customer journey are continually refined, based on the intelligence gained, as more applicants come through the system.

Positioning for a Digitally-Enabled Future

Ultimately, it all comes down to this: How can insurers grow, penetrate a larger market, broaden their customer base and reduce distribution costs? It’s not just by adding agents and surely not by sustaining manual underwriting processes. Nor will it be by maintaining the fragmented engagement-onboarding-decisioning cycle necessitated by multiple legacy systems.

By adopting a digital customer acquisition strategy, supported by an end-to-end digital platform with applied analytics throughout each part of the process, life insurance companies can transform the activities of the front, middle and back office into a continuum to drive better customer experience.

Companies taking on the challenge to modernize systems and the means by which they engage with consumers have the potential to issue policies faster, cheaper and build long-term relationships with a more profitable customer base.


Keith Johnson // Keith Johnson heads the Life and Annuities Business Unit at EXL and is a proven executive with over 30 years of diverse business experience in Life and Annuities. Over that time, Johnson was a Partner at Accenture where he held multiple roles, including running the Life insurance e-commerce practice, CRM practice and Insurance BPO practice. He also served as Client Partner for a number of large insurance carriers and served as the COO/CIO for Marketplace by John Hancock. Today at EXL, Johnson’s main focus is helping insurers streamline operations, manage risk, and fulfill a differentiated customer experience through digital enablement leveraging EXL’s proprietary software assets (LifePRO and LISS), analytics and operations management. Johnson earned his AB in Computer Science from Brown University.

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