It is tough to show consumers the benefits of having life insurance, but insurers need to change their engagement strategies to encourage adoption, according to Life.io founder and CEO Jon Cooper.
Life insurance is often neglected, simply because consumers do not wish to think about their death. However, these policies are critical and insurance firms need to start boosting their engagement efforts so consumers perceive life insurance as relevant. This might not sound like an easy task, especially when you consider insurance is hardly the most enthralling topic, compared to other daily distractions. Despite this, Jon Cooper believes it is possible and his company has helped clients increase their daily interactions with clients to more than other apps such as the NY Times. The trick is through improved engagement and making the policy intrinsically linked with healthy lifestyles and rewards.
It was a desire to help people live a healthier life that helped create Life.io. Initially, the team didn’t focus on life insurance and initially launched in the health insurance world. The company was one of the first entering the space to encouraging healthier lifestyles of customers through behavioural economics. It wasn’t until they were able to work closely with one of its early clients that the team had that lightbulb moment and realised life insurance was much better suited for what they were trying to achieve.
The reason for this was twofold. The first is that there is more incentive for life insurance firms to encourage healthy lifestyles as it impacts their customer mortality. The average length of a health insurance policy with a member is around three years, whereas a life insurance term is closer to 16 years. These longer term relationships between the carrier and the insured mean there is more financial incentive for the insurer to keep their customers healthy. The second reason came after some research, which revealed that around 40% of people in the US do not know who they bought life insurance from, Cooper claimed. Furthermore, only around one in 20 buy more products from the same insurance company.
He said, “By and large insurers really were not successful at maintaining that customer relationship and cross selling. When we learned this, the light bulb went off. We said ‘wait a minute, let’s take what we’ve built around engagement and wellness, and really use it to help life insurance companies build a better relationship with their clients’ and also improve their clients’ health.’”
In 2015, the company rebranded and shifted focus to life insurance. Several months later, Vitality revealed it was going to launch a health-focused life insurance product. This was great news for Cooper and the team, with expectations the market was going to move rapidly. Unfortunately it was not the case. He said, “The reality was that initially it didn’t move as quickly as we thought it would. There were a few years of insurance companies just starting to pilot and flirt with the idea.” The problem was the while consumers craved engagement, carriers were just not quite ready for this move. Life.io just carried on developing its solution and pioneering a new way of doing insurance.
Cooper explained that when the team was initially reaching out to the market, people thought they were crazy. The concept of using technology to directly and consistently engage with consumers seemed strange and unnecessary outside what the brokers were doing already.
Flashforward a few years and this is no longer a crazy idea. Customer experience has become one of the most important parts of most industries. A study from Limra in 2019 of c-level executives in the life insurance space put customer experience as the second top priority, falling just behind change management. This shift in the market has been quite swift, but Life.io was ready for it, as it had been a pioneer all those years ago.
What is Life.io?
Life.io offers four core products: Engage, Empower, Grow and Insights. The company’s first product was Engage and its goal is to get people to interact with their insurance firms voluntarily. This is quite a new idea as it is about getting people to engage with their insurer because they want to, not because they have to. The goal is to ensure customers see the brand of the insurer daily and are able to realise the benefits of the policy beyond the payout. He said, “We are really competing with people’s time and attention against companies like Facebook and Instagram, and other places people go in their free time.” To achieve this the InsurTech blends talent from the AdTech industry, which is about conversion an getting people’s attention, and the video game world, which is about keeping people’s attention. This built the foundations of its health wellness platform and because of its gamified tools, Life.io has session times around two or three times higher than places like the New York Times and USA Today.
The Engage platform supports meaningful and ongoing interactions with customers, offering them education, engagement and rewards. There are numerous ways in which the Engage solution can interact with a customer. For example, it can offer them classes, real-life stories, educational articles on finance, health, fitness and emotional wellbeing, it can also encourage positive lifestyle change through fun programmes and quizzes. Finally, users can connect their wearable devices and health apps where they can participate in challenges and earn rewards. Cooper added, “We really differentiate ourselves from others that have health and wellness capabilities as they haven’t focused so intently on the customer experience.”
The company’s Empower platform is a natural extension of the Engage platform. It lets policyholders get 24/7 access to their policy information, review and manage policies and contact their advisers and insurers when needed. This not only gives the consumer a better experience and greater sense of control, it allows an insurance firm to reduce costs of needing to reach out for updated information or other costly interactions.
Life.io’s latest product, Grow, was born through interactions with clients. Unlike Engage, which was one of the first of its kind, Grow was entering an existing marketplace. Grow is a digital purchasing platform that allows firms to give customers an e-app, dashboard suite, integrated quote and needs analysis. Through its services, people can quickly search for new policies and easily buy them. Cooper said, “We’d sort of see people engaging, but we’d have no way to capture that engagement and monetise it for our clients other than just sending them a lead. We thought wouldn’t it be great if we could actually help them cross sell and help them upsell.” While building the platform, a number of its clients voiced their interest and worked together to ensure the tool could meet the exact needs of insurance firms.
Finally, Life.io Insights brings all of Life.io’s capabilities together in an interactive data analytics and visualization dashboard designed to deliver actionable insights to carrier clients.
Why is health and wellness important for insurance?
Having a healthy lifestyle should be pretty obvious. It is in our own interest to keep ourselves fit and ready. However, it is often let slip as other things grab our attention instead. It is not just about living longer, but also about saving money. According to a report from academic researchers, around 66.5% of all bankruptcies in the US were related to health. This includes high costs for care or time out of work. This worrying stat shows how important maintaining health is and getting a life insurance policy that reinforces healthy living to stave off mortality.
Much like their health, people tend to forget about getting life insurance. According to data from Statista, just 54% of people in the US have life insurance. Cooper said, “No one wants to think about if they’re dying. [Additionally], the value and benefit of life insurance doesn’t even go to me, it goes to my beneficiary.” It is tricky to show the benefits of life insurance as it assists the people you leave behind. It is not an easy discussion to have. Cooper explained that life insurance is the antithesis of behavioural economics as consumers pay forever and the rewards are intangible, only happening with your death. This means to encourage more people to take out a policy, firms need to change the way policies are set out.
“[Life.io] is helping insurance companies redefine the value proposition to not be about when people die, but instead to be about rewarding people for leading a healthy life. This has the opportunity to close that insurance gap and compel people who are uninsured to think about maybe it is worth that $20 to $50 a month to get term life insurance.”
This is also part of a growing trend in insurance, which is transforming the industry from a reactive one, to a proactive one. In the same way that auto insurers are trying to prevent people from having accidents, or other verticals that are attempting to provide consumers with enough information and education to avoid future claims. By changing the lifestyle of a consumer, the insurer can reduce the claims frequency.
How Covid-19 helped
The pandemic has played havoc with a lot of industries, but InsurTech has been one of the few to excel during this time. Life.io is no different and it has managed to grow its business during this time, as firms begin to understand the importance of such technology.
Cooper said, “In the past, having a fully digital customer acquisition process that supports an advisor, like the one we have, may have been a luxury or something you do a small pilot on to test. We’re now seeing insurance companies are running towards solutions like this, because they need it in order just to keep selling new products.”
This is the same for increasing engagement within insurance firms. Cooper explained that in March and April, demand for its Engage platform slowed down as firms focused on assessing the situation of the pandemic and supporting mission critical jobs. However, they soon realised their brokers couldn’t just go for lunch with clients or meet new customers at events, and so there was a lightbulb moment where they realised they needed tools like Engage to survive the pandemic.
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