The life insurance industry has been steadily in transition for years now. Over time, the industry has been relying on legacy systems and there have been very few changes in the distribution. Add to that a significant lack of new products, and we have an industry moving at a snail’s pace. In comparison, other industries have been able to transform their business model completely especially in terms of using the digital world.
One does not need to look far to experience this transformation. Amazon, the world’s largest online retailer has altered the world of retailing whereas Quicken Loans, the largest online retail mortgage lender has redefined the home mortgage industry.
Innovation is the norm these days, and companies actively pursuing it may channel their way into life insurance marketing soon. For now what seems like a possibility can become a reality in the future. In the near future, about five to 10 years from now, we might get to hear strange news. Here’s to give you a taste of what’s to come if we do not focus on innovation.
"Medical examinations complete in 3 days with quality services of MedEx"
Walgreens, the largest drug retailing company in the U.S., paves way for the medical examination market with the launch of MedEx, a service for providing medical exams for new business life insurance. The comprehensive range of services provided by MedEx consists of a basic exam to a complete detailed examination for an insurance carrier’s life clients at any of the 12,000 locations around the country.
Customers no longer are compelled to schedule an appointment and wait a week or two to get the results. Through a user ID and password assigned to each client, results can be easily retrieved online simply by visiting any location around the country. In addition, the information is automatically updated in the life insurance carrier’s underwriting system. This makes it easier to automatically review and issue it as per the underwriting decision tree, unless there is a flag for additional informational.
As a part of the Walgreens service, a client has signed approval forms for obtaining the doctor’s records whenever needed. Using the software, a doctor’s office can upload the records to a secured site and notify the life company for obtaining it.
MedEx even provides clients the opportunity to evaluate the service provided to them. As each customer receives their results, a customer survey form is sent for reviewing the service. Based on the customer feedback from the survey, MedEx is reimbursed for its services. For instance, if they receive a high score of 10, they are paid 110 percent of the fees.
Due to this new game changer, the medical examinations cycle can be completed in three days, starting from the initial appointment to the time the results are completed. Following suit, Target and CVS Caremark have announced expansion into the medical examination business as well.
"Amazon.com launches Amazon life insurance"
Giant online retailer Amazon diversifies into life insurance with the launch of Amazon Life (ALife) — a life insurance company that deals with term insurance. The move is being viewed as a game changer in the industry as it is based on a customer’s point of view of obtaining a life insurance policy.
After careful analysis of the customer market and scrutinizing the process from inception to end, Amazon has been able to analyze what the customer needs are. The company, without any legacy limitations or perceived experiences, has brought forth a user-friendly system that is easy to understand and has the potential to offer flexible coverage.
ALife is automated and has extensive data algorithms that give it the ability to run detailed data analytics of the customer, access medical databases of prospective customers, and issue the policy automatically. This new policy is designed to adjust policy coverage based on the current lifestyle of the customer, which means the customer does not have to reapply for life insurance or need to go through medical exams again and again.
A notable example is the Hendersons, who have been using the basic term policy for five years. Now, they have a home and a child. The policy automatically recommends to them that they increase insurance coverage from $250,000 to $500,000. With a single click, the Hendersons can accept the agreement and automatically expand the policy limits. There are no other hassles involved. They simply get an automated addendum issued informing of the change made and the policy is updated. Before sending out a recommendation, the company makes use of the detail analytic algorithms to determine whether the coverage change would have an effect on the profitability of the policy.
Another example worth mentioning is the Jones. It has been 10 years since the couple retired and currently they may not need a large life insurance policy. An email is sent out to recommend that they should alter their policy coverage from $750,000 to $250,000. This helps the customer save on premium costs and limits of keeping the policy till the age of 100.
Free instant message-delivered advice available 24/7 along with easy-to-use online tools makes it effortless for the customer to get access to tailored information according to their time, schedule and needs. ALife also offers group life insurance for employers, which can be continued after the individual retires and spares the trouble of a re-underwriting.
The ALife internet system provides all the information needed by the customers. A simplified policy, rephrased in an easy-to-read format, is also available. The innovative system adopted by the company enables it to deliver an average turnaround time of four business days, starting from the time of applying for the policy to the time it is issued, and it has a remarkable 90 percent approval rate.
"Google takes the lead in innovation with DirectLife"
Getting a quote from a single carrier has become so "old school" with the introduction of Google DirectLife, an initiative that works with multiple life carriers and can provide you with several quotes, features and better coverage instantly. Functioning in about 750 locations in high-traffic malls, DirectLife interacts with its clients using the Internet, phone calls and in-person meetings as a medium. It designs the coverage and the product based on the feedback of the client.
A complete on-site medical examination is conducted either when the application is being taken, or a medical exam is scheduled when the application is being processed. Once the medical results are received and the client’s needs are determined, it is sent into a database and approved carriers can then bid on it. All life policies offered by DirectLife have no fees attached for surrender charges and no service fees billed to the customer. In fact, even after the policy is issued, DirectLife continues to serve as an agent for records. Clients have the ease and feasibility of getting multiple bids through the services of one company along with other added benefits, freeing them of the trouble of applying multiple times.
Sound worrisome? Innovation by tough competitors with greater resources and outreach can eliminate a number of businesses in the life insurance industry. Before this fiction becomes reality, expand your vision, rethink your options, invest efforts into improving your customer services, and design products that bring added convenience to your customers.
Your business' life depends on it.