Producers may see revenue opportunity in reaching out to Main Street America, but the demands of the business and today's economic headwinds make it a challenge at best.
Statistics show that nearly 60% of middle-market households lack individual life insurance. In addition, 31% of all middle-market households and 37% with dependent children admit they currently don't have enough life insurance.1 Surprisingly, one-third report that they are waiting for an agent to approach them about buying life insurance. 2 Yet, the need for life insurance has never been greater -- Main Street Americans are being squeezed in an economic vise and face a significant financial security challenge.
Given these facts, it is critical that carriers, distributors and producers alike find ways to make it easier to sell to and service this underserved market -- individuals with household income of up to $200,000 or a net worth of approximately $1 million who are seeking policies with face amounts up to $5 million. Working together, we have a huge opportunity to open up access to life insurance and more effectively bring solutions to this market.
So how does a carrier help to ensure distributors' and producers' success as they work to protect the long-term financial security of families in this demographic? Carriers like the Genworth Financial companies are presenting a new value proposition with enhanced technology and service offerings that enable you to be more productive and more efficient, and make Main Street America an attractive and profitable market.
We concur with Jeff Yates, executive director of the Independent Insurance Agents & Brokers of America's Agents Council for Technology, who notes, "Technology is having a huge impact both on processing as well as the ability to touch the customer and open the producer to new sales."
Let's face it -- life insurance processing has traditionally been complex and slow. To address this challenge, progressive carriers are making strategic investments in their people, technology and service design to make that work more elegant and to make the carrier easier to do business with.
What's most important to you, though, is that carriers continue to strategically update and redesign processes to remain current with advances in information gathering and data exchange capabilities and decision technologies.
Fulfillment elegance
One example is the life insurance fulfillment process. While fulfillment is not new, new technologies are now available to streamline the sales process and empower agents to deliver an outstanding buying experience to the consumer.
One specific example of this is Genworth's Life Quick Request, which makes the connection with the prospect far simpler and more powerful to help close more sales -- saving brokers time and expense. The process streamlines information gathering, making it possible to obtain more data up front rather than relying on the requirements process for all the needed information. Now, busy producers can go online to complete a short-form list of general questions. And in 24 to 48 hours, the prospect is contacted via phone with additional scripted questions. These steps shave a week or more off traditional cycle times.
Showing results
Today's technology solutions can substantially shorten the cycle time for completing an application. For distributors and producers, these new-found efficiencies not only make it more profitable to sell to Main Street America but it frees you up to attract new clients and focus your value-add on higher face, more complex cases.
One Genworth distributor seeing excellent results is Diversified Brokerage Services (DBS), a Lifemark Partners BGA based in Minneapolis. The improvement in business is noticeable, according to George (Chip) Van Dusen IV, the company's president. The main driver for DBS's success with Life Quick Request is increased profitability. According to Van Dusen, this fulfillment service reduces cycle times, improves placement ratio and decreases the time spent on processing cases, allowing DBS the time to focus on growing current accounts and handling more new business. In fact, DBS has seen a 6% to 8% increase in placement ratio, as well as a 10- to 14-day reduction in the turnaround cycle -- in line with averages other Genworth customers are seeing. In a typical week in mid-September, 77% of DBS' term life insurance applications went through Life Quick Request, Van Dusen notes. And, to date, more than 6,000 policies have been processed through this fulfillment system, he adds.
Van Dusen is getting great feedback from producers who work with his firm. Among the testimonials he cites is an account from one producer who had been primarily focused on selling 403(b) annuities to teachers, yet had not sold them any life insurance. With help from the new fulfillment process, the producer is now selling six to 10 contracts a month and feels compelled to ask these annuity prospects about their life insurance needs.
Enhancing relationships
The marked improvement in distributor performance and in consumer behavior, including the higher likelihood of prospect conversion, is emblematic of how state-of-the-art technology melded with exceptional service processes can enhance the relationships between carrier and distributor, distributor and agent, and agent and prospect.
Working hand-in-hand with customers, progressive carriers are helping to change the industry's traditional value proposition. Continuing to make the sales process simpler, more efficient and cost-effective not only drives business, but also enables all members of the value chain to help secure the future of Main Street America at a time when it's needed most.
Elena Edwards is President of Operations for the Retirement and Protection segment of Genworth Financial. She leads teams in Richmond and Lynchburg, Va., Brentwood, Tenn., and San Rafael, Calif., that are responsible for delivering service to distributors, financial advisors and producers, policyholders and beneficiaries of Genworth's life insurance and long-term care insurance policies and annuities contracts.
Mike Shadler is the Chief Information Officer for the Retirement and Protection segment of Genworth Financial. He is responsible for setting technology direction, as well as the segments applications and technology infrastructure.
Footnotes:
1. LIMRA 2009: Is There Magic in the Middle Market?
2. LIMRA 2005: Trends in Life Insurance Ownership
