In the age of smartphones and instant access to information, it’s no surprise that even the most traditional industries are undergoing a digital makeover. The insurance sector, once synonymous with stacks of paperwork and lengthy meetings with agents to get quotes, is no different.
Today, InsurTech, an emerging category in the connected economy, is spearheading this digital transformation, with startups leveraging advanced tools and technologies — from artificial intelligence (AI) to big data analytics — to transform how individuals choose and purchase insurance.
According to a research report by TransUnion, the trend is clear: The proportion of consumers shopping online for insurance surged from 22% to 27% between 2022 and 2023, while those turning to agents dropped from 42% to 35% over the same period.
The study further reveals a notable trend among younger consumers, who are turning to online communication channels when assessing life insurance options.
These insights dovetail with findings from PYMNTS Intelligence research that shows that while younger individuals are more likely to have auto and health insurance, over 60% of Gen Z and millennial consumers plan to purchase one or more insurance types within the next 12 months, with nearly half eyeing life insurance specifically.
One significant way digital platforms are transforming the life insurance landscape is through the simplification of the purchasing process. Websites and mobile apps offer intuitive interfaces that guide users through the process, eliminating the need for complex forms and confusing terminology.
Moreover, with just a few clicks or taps on their smartphones or computers, consumers can compare quotes from multiple insurance providers, assess different policy options, and make informed decisions about their coverage.
Take digital insurance company Lemonade, for instance. By inputting basic information such as age, health status, and desired coverage amount, users can receive tailored insurance options in seconds, enabling them to make informed choices without the need for extensive research or consultation.
InsurTech firms are also transforming the sector with platforms tailored for life insurance agents, enabling agents and their clients to access near-instant quotes, compare, and apply for life insurance and long-term care insurance across multiple major carriers.
For instance, BackNine’s Quote & Apply streamlines the process with an eApplication software that can be completed in just five minutes, and also provides agents with personalized Quote & Apply websites which can be integrated into existing sites as white-label widgets.
Prioritizing agents’ convenience underscores the industry’s recognition of the crucial role professional guidance plays in the insurance process — a trend also highlighted in the PYMNTS Intelligence study.
In fact, despite their preference for online convenience, Gen Z and millennial consumers continue to place significant value on the guidance and expertise of financial professionals, even as they conduct their research and gather information online.
Specifically, nearly half of each demographic value the expertise provided by financial experts when making their ultimate insurance purchase decisions. This preference is rooted in a widespread lack of confidence among young consumers regarding their understanding of insurance products.
In conclusion, digital platforms are reshaping the life insurance industry by streamlining the purchasing process for consumers, while simultaneously equipping agents with advanced tools and technologies. This convergence of technological innovation and professional expertise is positioning the sector to better meet the evolving needs of today’s connected consumer.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More