In the Spotlight – Amazon and Google Impress with Life Insurance

Think insurance, and you visualize dealing with a hardcore insurance sales agent, lots of financial jargon, medical reports, lengthy paperwork, most importantly lack of transparency and trust. All that is passé! Availability of insurance on a digital platform has brought a paradigm shift in the way insurance is being bought in today’s world of high-level technology and e-commerce techniques using latest insurance technology.

The Human Aspect of Selling Life Insurance

That said, it is also pertinent to note the importance and value-add that an honest, experienced and knowledgeable insurance advisor would bring to the discussion table.  This phenomenon is coupled with the fact that insurance penetration is still low in most markets. The human factor is irreplaceable even with the best technology, especially concerning permanent policies.

Financial product selling is much different from the physical products that companies regularly sell. Insurance is a highly regulated and technical product. A customer would look for proper guidance and expert advice before buying so that your financial needs goals are adequately addressed.

The Dynamics of Life Insurance Today

Technology has virtually entrenched itself in every business domain, People especially the GenNext are quite tech-savvy and prefer to do their tasks themselves at their convenience on their laptop or mobile phone. Companies have taken cognizance of this change in market dynamicsleading to a reduction ofinsurance field staff.

Digitalization has eliminated the physical boundaries of doing business, reduced paperwork including usage of the e-signature.More efficient processing of digital insurance applications resulting in quicker turnaround time has made insurance buying hassle-free.

Most business nowadays is done electronically, even if a customer is physically present.

E-signatures and e-applications are the norms in the way we do business thesedays in the backdrop to the insurance tech landscape.

Having customers across the country and then add to this the cost-reduction possible by working from and doing away with an office.Flexibility regarding working hours is an added advantage.

With virtually every type of information available online, customers are now better-informed and hence more demanding. A plethora of data also means quite a lot of confusion in your mind.

All this life insurance technology could provide an excellent opportunity to an agent who is proactive and well-informed to add value to your needs as they too would have the same online information.

Basic Requirements of Insurance Carriers

Technology in insurance industry means that effectively agents would be doing the same work, namely, meeting prospects, doing a need analysis,and providing feasible insurance solutions.Not only would they be more efficient and customer-centricbut would also have a fair chance to stand out in a crowd.

Quality customer service would clinch the deal to make it mutually beneficial.

Companies can also use insurancetechnology to train their advisors better and to become more effective.

Companies are adopting both online processing and mobile applications. We can take this as a positive sign in life insurance technology trends as it reduces processing time and errors. Effectively, it is like a ‘single window clearance’ system.

It seems that in these technology trends in insurance industry,the following key factors are imperative to ensure smooth and successful transformation:

• Reliable and robust IT set up of companies for continuous, uninterrupted and secure business functioning including security of customer data.
• Standardization of policy approval processes including medical underwriting.
• Fixing a threshold limit of up to$1 million Sum Insured (face amount) for implementing the standardization process.

Low-interest rates and yields on policies make this all the more necessary. Consequently, the average sum assured is increasing mandating an easing of policy approval and medical underwriting processes.

The following example would explain this better:

• Let’s assume your annual average earnings are between $40K and $50K. If you would like to earn the same amount upon your death, your insurance face amount must be at least $1 million.Even if you can afford and wish to buy higher insurance, underwriting guidelines would impede most companies.
• You must surely know the importance of having simplified processing and medical underwriting This facility also helps an agent secure your future better with the right amount of coverage.
• This point does not suggestscrapping of the regular underwriting procedures for policies more than the threshold limit of $1 million – on the contrary, it may encourage the agent to do a cost-benefit analysis and suggest you the right amount of coverage.
• If beneficial pricing is available, he may then advise you to go for full medical underwriting.

Amazon Debuts in the Life Insurance Market

In a game-changing move, on the insurance technology news front, Amazon the online retailing behemoth has launched its insurance arm – Amazon Life (ALife).Currently, ALife willonly sell term insurance. It promises to cause ripples in the insurance industry as it would look at insurance buying from a customer’sperspective. Amazon and its likes in the digital space will have to rise to technological challenges. However, this is where the opportunity lies.

Amazon carefully analyzed the insurance market, studied the insurance cycle from start to end.It also critically examined the customer needs. Amazon not being an existing playerhelped it not to carry any preconceived notions, or particular bias/mindset. Resultantly, it brought in a fresh perspective to the business, developing a system that not only is simple but is also flexible and user-friendly.

Features of Amazon’s New Life Insurance System

The system is robust and so built that it automatically calculates and suggests the increase or decrease of coverage that your family may need at any point in time.It is hassle-free. Thesystem affects the required changes/policy updatingautomatically and informs you of the change.

The software is built to automatically check the financial impact and viability of the recommended change in coverage.

The program is so exhaustive that it also advises you of a decrease of coverage, if needed. So, if you are no longer working, you would receive a message via email suggesting that you reduce your coverage proportionately,helpingyou save on costs.

Free messaging round the clock, user-friendly online tools, availability of information to suit your individual and family needs helps your decision-makingeasy and accurate.

Group insurance is another product that ALife offers. What makes it worthwhile is that individuals can continue their coverage post-retirement without the hassle of going through the underwriting process again through insurance technology by ALife.

ALife Online provides you with simple, yet detailed information to suit all your needs. Jargon-free, simplified explanations of policy features for all products are available online. This unique system has drastically reduced the processing turnaround time. Right from the time an application is received to the issuance of thepolicy the entire process is completed in four business days.  Alife is currently processing approvals at an incredible 90 percent.

Google Surges Ahead Through Its Innovative Initiative – “DirectLife”

Not to be left behind in the insurance tech landscape, Google has taken online insurance to the next level with its innovative initiative Google DirectLife.Obtaining a single quote is passé.Google DirectLifeprovides you an opportunity to have quotes from different providers. You can do a comparative study of the features and coverage available with just a click of your mouse.

DirectLifemarkets its products via the internet, telephonically and also through field sales calls. Additionally, it reaches out to prospects from over 750 high-footfall malls.

Client feedback is used to design the appropriate product and coverage for each prospect.

A medical examination is completed onsite when an application is submitted or is scheduled during processing of the application. Upon receipt of medical results, clientneeds are analyzed and directed to all approved providers to send their quotes.

DirectLife does not charge its customer for any expenses towards surrender or servicesfor all policies sold. You don’t pay any fee or charge for policies you buy. Post sales service is also offered as DirectLifewould continueas an agent.

The most significant advantage that DirectLife offers is a comparative analysis of product features, pricingand so on before you make a decision on buying a policy, and yet you deal with just one company. You would make ahassle-free and informed decision.

The Future of Life Insurance

Cutthroat competition from established players having substantial financial and marketing resources may make it appear like the end of the road for many business verticals in the life insurance industry.

Going forward, the process of selling life insurance would be survival of the fittest. Value addition regarding better customer service, innovation, continuous knowledge upgrading, a customer-centric approach will ensure the continuation of existing providers and agents.

Those who are not proactive, flexible and customer-focused would become extinct.

Unconfirmed reports suggest that Amazon, the US-based retail transnational has invested more than $15 million in Acko General Insurance Limitedan Indian company providing insurance products online.

Acko is a licensed insurance provider. Amazon plans to develop its Indian business both by distributing Acko’sproducts and jointly developing new insurance products with it.

Acko has reportedly raised $30 million for its business recently.

The deal with Acko would synergize with Amazon’s plans to further strengthen its position as a robust and reliable financial services provider. Currently, Amazon offers a variety of financial products to suit different industry/customersegments.Access to Acko’s customer and products would enlarge the retail giant’s reach and growth.

The current market size is minuscule as compared to the enormous potential that lies ahead.

Amazon’s Role in the Indian Insurance Market

Expectedly,we may see the following repercussions of this on the existing players in the Indian insurance market:

• Amazon’smassive database of Indian customers gives it a head start over its competitors.
• It can leverage this database to tailor-make insurance products to suit individual customer needs.
• Customer’sfamiliarity with navigating and ease in using its site would help Amazon replicate the same in its insurance product offerings.
• Current minuscule market penetration of online insurance compared to its phenomenal untapped market size.
• The ever-burgeoningmiddle-class aspirations coupled with a massive young tech-savvy populace makes India an incredibly attractive destination much as the same that China was a few years ago.

Amazon’s entry into the Indian market – a relatively new and virgin market makes a lot of business sense. Not only would it grab the ‘first movers’ advantage, but its success in India would help strengthen its position in US and European markets. These mature and traditional markets are vital to Amazon’s current business.

The sheer size and future potential of the Indian market are what makes it so irresistible. What further prompted this decision is the fact that its most significant competitor Flipkart an Indian startup who has met with great success has shown its intentions of joining the online insurance bandwagon.

The competition seems to be heating up. The recent big-ticket acquisition of Flipkart for a massive $22 billion by Wal-Mart could completely change the equation.

This is where Amazon’s business enterprise with Acko could prove a winner. Success in this venture would propel Amazon to build similar partnerships in its core US and European markets. Competition in its core market is not so intense as in other markets.In such a scenario Amazoncould consolidate its market share to build up a leadership position.

Rising Trends in the Insurance Market

In the light of these potential developments,existing players and tech companies in the insurance sphere would see some intense competition resulting in a shakeup and market consolidation. There could be a flurry of mergers and acquisitions in the online insurance space.

A comprehensive report from a well-known business research bureau highlights some interesting observationsabout the online insurance segment.Some that may have far-reaching implications are listed below.

• Insurance technology innovations are shaping market dynamics in some of the major life insurance markets worldwide and current market trends driving the market shortcomings of the current product portfolio, process and customer service or the lack of it, both from the customers and companies’ perspective.
• This willinfluence the market by creating a win-win situation both for the customers and providers.
• Financial markets across the world are highly-regulated. Sharing best practices amongst all players both new and existing could help avoid the pitfalls that can occur while applying emerging technologies to digital platforms.
• This Indicates what lies in store for the insurance sector which is witnessing a spurt in the number of online providers.

The Last Word

The insurance market is dynamic in nature, always has been and will be. With new players entering into the fray like Amazon and Google, it is going to be interesting to see in which directions things will go. However, one thing is sure, and that is, to survive in the competitive world of insurance today, insurance technology is the key. Without it, it will be like being lost in the woods without a compass.