Here's what the future of life insurance distribution might look like

Worksite life sales to the mass market are also a "huge opportunity" for two reasons, says Schwetlick. First, it's convenient for buyers; additionally, there is an implicit employer endorsement of the insurer that helps build buyers' trust. That higher level of confidence can jump-start the sales process, he notes. Another attempt to reach employees through an alternate channel is the addition of voluntary benefits, including life and disability insurance, to Aon Hewitt's private health exchange offering. Companies can leverage their participation in the exchange to have selected carriers offer life coverage and other insurance products as a voluntary benefit to their employees.

Technology's growing role

Life insurers have a reputation for being relatively slow adopters of new technologies. Nonetheless, companies are modernizing their distribution channels and many of these changes are aimed at streamlining applications and making life insurance advisors more productive. Insurers are seeking operational efficiency in the way they do business and that's clearly being driven by technology-based applications such as e-underwriting, e-applications and straight-through processing technologies, says Jim Kerley, chief membership officer with LIMRA and LOMA in Windsor, Connecticut.

Tom Scales, research director of Clearwater, Florida-based Celent's life, annuity and health practice in North America, highlights the emergence of automated underwriting tools. Insurers can use ScripCheck to drive history reports and credit reports without human intervention, speeding the decision-making process. "You get online, fill out your app, electronically sign the approvals to gather the data, the system goes out there and grabs the data and makes a decision on the fly," he says. Not all channels are adopting these technologies at the same pace, says Herrmann. In Prudential Life's experience, the adoption rate among captive agencies is approaching 100 percent, and almost all business comes in that way. But among third-party sellers, the adoption rate is only about 20 percent to 25 percent. "Part of that is just breaking the old tricks of the trade and the patterns of experience people have that they don't really want to change," he says. 

Implications for advisors

Evolving technologies will help agents on several levels, according to Sushma Viswanathan, analyst, financial services team, India Research Centre in Hyderabad, India. Web analytics and customer relationship management (CRM) tools will allow insurers to generate more in-depth customer insights and create customized products based on buyers' needs. Insurers' use of social media can also be leveraged to obtain customer feedback and positively influence prospective customers.

Interactive mobile apps, e-apps and the availability of high definition video conferencing has made it easier for advisors to sell life insurance products while saving their efforts and time with increased efficiency, Viswanathan says. Prospecting and lead management become more efficient and have an expanded demographic reach. Technology can reduce time spent on support tasks while increasing sales time, as well. He cites Genworth's ePolicy Delivery service of life insurance policies as an example of this benefit. According to Genworth's site, policy delivery times were cut in half during a pilot run of the service.

Advisors are seeking tech gains on their end, as well. Kerley has met several advisors who conduct business through Skype and through other online methods. Other agents are taking their offices paperless. The life insurance industry is not on the "bleeding edge" of technology, he says, but "clearly, we are on a forced march for efficiency in the use of technology in virtually every corner of our business."

Scales, who had extensive operational experience before joining Celent, has a clear vision of how he would manage an agency with a multi-channel approach. This would include a website where buyers could purchase insurance. He would also have staff in the office to handle phone-based sales. These channels would allow him to maximize his time in front of prospects with complex cases or those who wanted in-person meetings. "I'd preserve my coming out and sitting across your kitchen table for either older folks [who] have a comfort level with that or I'd be going to the office of somebody that's going to invest millions with me," he says. "The people and the website behind me would be picking up all the smaller cases. So, you can tier your business and play in multiple spaces without killing yourself."