Digital tools won't be enough to counter the decline in life insurance sales, according to three industry experts. But they can certainly help financial advisors optimize their productivity and better serve their clients.
At the recent Congrès de l'assurance de personnes (Life Insurance Convention) held in Montreal, these experts were invited to answer the question: “Can technologies deliver solutions for productivity and customer service?”
Clément de Laat, life insurance advisors and President and CEO of GTS+ Financial Services Firm, acted as moderator. He recalled LIMRA data confirming the steady decline in policies sold across the country.
Introducing himself at the start of the session, François Levasseur, Vice President, Global Alliances and Acquisitions at Equisoft, explains that the role he has held since 2018 allows him to travel all over and discover new technologies available elsewhere.
“In Canada, we have an oligopoly with few insurers. Innovation is perhaps slower than in other countries. This gives us a slightly different perspective and enables us to see how we can bring about change in the Canadian market, which I think is in great need of it,” says Levasseur.
Marc-Antoine Mainville, partner and co-founder of Groupe Consilium, has been a life insurance advisor for 18 years. He also co-founded the OneWallet technology platform. “We've been working for four years to develop a new solution for advisors to work with and bring the customer closer to the advisor.”
Mainville adds that since entering the business in 2006, “I haven't seen any technological advances for us advisors in our business practices.” Sure, insurers offer a multitude of tools for advisors and their administrative teams, “but the customer is always a bit left out. There aren't really any tools where customers can access their financial data at any time,” he adds.
Roddy Awad is President and CEO of Lavvi. Co-founder of the company created in 2007 under the name TKS, this distribution platform aims to help insurers stand out from the crowd. Since 2020, as a result of the pandemic, distribution technologies have undergone significant expansion. “We've never had access to better technology, but policy sales are still going down,” he observes.
Insurers assess their technology needs through the lens of products, while advisors are busy growing their businesses and serving their customers. “It takes someone in between to tie together the strings. Managing general agents have a role to play. The technology already exists, but it's not enough,” adds Awad.
The fluidity of product sales and underwriting processes have not changed much, says Marc-Antoine Mainville. “Everyone's running out of time,” he says, referring in particular to medical questionnaires, a process that would greatly benefit from automation.
Consumers have not seen an evolution in advisors' business processes, unlike what they’ve seen in other sectors, Mainville points out, referring to the significant investments in technology by insurers and financial institutions. “Personally, I don't think they're doing it in the right way.”
Demographic changes
François Levasseur notes that Canada's demographics have changed significantly in recent years, with the influx of immigrants, and the products offered must evolve to meet the needs of these new customer groups. “Distribution methods must evolve to better reach younger generations and new Canadians.”
The challenge of life insurance sales must be met by the entire industry, adds Levasseur. He believes that technology is a gas pedal, “but it's not a means to an end.”
In his view, regulators also need to be more flexible to encourage the distribution of insurance products. If certain products can be distributed without the help of a representative, could we envisage, as is being discussed in the United States, allowing a virtual agent to sell insurance as a physical person does?
Levasseur insists that all industry players, including the Autorité des marchés financiers in Quebec and other regulators across the country, must work together to increase the level of financial security for Canadians.
Marc-Antoine Mainville points to two factors that may explain the decline in policy sales. Firstly, people aged 45 and under are starting their families at a later age than in the past. It is often the arrival of a first child in a family that triggers the need for life insurance. It's not compulsory to take out life or disability insurance,” he says, “unlike property insurance for cars and homes.”
Secondly, the labour shortage means that fewer and fewer young people are taking the plunge into entrepreneurship. This phenomenon is also affecting the life insurance advisor career, notes Mainville.
Some firms are managing to distinguish themselves by distributing products entirely digitally. François Levasseur cites the example of the Emma platform, which reaches younger generations via social networks and offers them term products. In his view, the e-proposal buying experience helps to broaden the advisor's client base, whose first reflex is to sell more complex, higher-paying products to high-net-worth clients.
Financial literacy
According to Marc-Antoine Mainville, technological tools enable advisors to increase their proximity to customers, particularly through financial education. “When they have their coffee in the morning, consumers don't ask themselves what insurance product they could buy.
Through their phone, which they carry with them at all times, or nearly all the time, customers can access information when they're thinking about their financial security. If the advisor provides more information upstream of the sales process, he or she will have more useful time to devote to them at the underwriting stage,” says Mainville.
For his part, Roddy Awad believes that the industry needs to eliminate all the friction associated with compliance requirements that hinder advisor productivity. They can then focus on building their relationship with the customer and better understanding their needs.
When the advisor has to move from one platform to another to offer products with different insurers, the process lacks fluidity. “Distributors have a big responsibility in all this to be the bridge between insurers and advisors,” Awad continues. “I think we can find a happy medium between efficiency and the human experience.”
Customer relations
According to Marc-Antoine Mainville, “what the advisor loves most of all is the relationship with his customer”. No matter how old they are, or what tools they use, technology will continue to evolve rapidly, and advisors will have to adapt to meet customer needs.
“We see technology tools that offer advisors many options, but unfortunately, we're only going to use maybe 20% of them,” he says.
“I'm very familiar with technology, but I want it to be simple, I want us to bring automation to the process in terms of application documents, underwriting, compliance,” adds Mainville.
The advisor doesn't need to understand how the technology works. Once the information on the client and their loved ones has been entered into the system, the advisor should be able to offer the products and explain them without having to go through the data-entry exercise again and again.
François Levasseur says he has worked directly or indirectly with over 1,000 life insurance advisors who have completed their digital migration over the years. The customer management system (CRM) must combine all the information gathered, regardless of its source.
“What's important is to have a CRM that centralizes all communications for compliance, but not just for compliance. Eventually, this is what becomes more valuable when the file is well documented: all contacts and documents are in the right place. When the customer calls, you can easily get a 360-degree view,” emphasizes Levasseur.
Artificial intelligence-based algorithms can then be added to generate content, reminder alerts and so on. The industry is taking some time to adapt, but progress is being made. “I see a lot of openness on the part of distributors and insurers. I think the advisor will win out in the end. I'm optimistic about that,” he adds. In his opinion, advisors have come a long way in the last 20 years in their use of technological tools.
For his part, Roddy Awad believes that even older advisors can adapt, as can consumers of technology products in general. With the right training and improved tools, even the least tech-savvy can take the first step. By integrating technology into the relationships between industry partners, the important thing is to create an environment that enables the advisor to be more effective, insists Awad.
Productivity
Despite technological advances, life insurance sales continue to decline. What can be done about it? Marc-Antoine Mainville gives the example of the technology adopted since the pandemic, which enables him to meet more customers on a daily basis.
“In my business practice, instead of having appointments with three or four customers, I can call seven or eight,” he says. Electronically signing documents also speeds up the sales process and, ultimately, the advisor's sales growth, according to Mainville.
Despite the progress made in automating and digitizing business processes, the decline in sales has been noticeable over the past decade in life and health insurance, says Philippe Le Roux of the Insurance Journal Publishing Group. “Market penetration in life insurance has fallen by 30%. What's the problem?” he asked the audience.
Marc-Antoine Mainville reiterates that there is no shortage of quality tools, but advisors need to be able to use them in a single work environment, which is not yet the case. “We need a more open architecture, with a platform that can aggregate relevant applications,” he says. He also points out that the compliance burden has increased since he started his practice in 2006, when technology was supposed to simplify things.
Roddy Awad adds that compliance standards are more onerous than they used to be. And while it's true that insurers are developing tools to help advisors, the applications are designed to meet the insurer's needs first. “That's why, I repeat, managing general agents have a responsibility to force all partners to work together.”
François Levasseur raises several questions that would need to be answered to halt the decline in policy sales. “Are commission rates on term products well adapted so that advisors have an incentive to sell them and serve the customer? Are we reaching the customer with the right products? Do we need more innovative products? Do we need slightly different distribution networks?”
Reasons for the decline
A consultant in the audience pointed out that career entry has changed considerably since she entered the profession in 2001. Back then, the recruit was accompanied by a mentor who taught him or her the rudiments of the trade. Beginners knocked on doors and, once the policy was sold, asked for references. Times have changed, and younger customers are reluctant to accept this approach. Experienced advisors look after their customers and do less prospecting. Younger advisors look for clients with high assets, to whom they can sell products that offer better returns.
Agreeing with this summary, Marc-Antoine Mainville recounts that in his early days, the mentors he worked with sold between 300 and 500 policies a year. “I'm not sure there are many in the room who achieve that these days,” he says. On the other hand, being able to talk to customers virtually, rather than spending hours in traffic to meet them in their homes, certainly contributes to advisor productivity.
An advisor who already has a pool of customers aims to sell them other products as their needs evolve, and doesn't necessarily need to prospect. If he does his job well, word-of-mouth is all he needs,” continues Mainville. He recognizes that middle-class families and low-wage earners are being left behind by the industry.
Consilium's vice-president has purchased five business volumes over the years. To retain customers, even the smallest accounts, he uses technology to maximize his time. “If the policy brings me $500 to $600 in commission, I'm not going to spend three hours on the road.” And customers are increasingly open to the virtual approach. In his opinion, by providing better service and good recommendations, the advisor can maintain the business relationship for several decades, earning more than the resale of the portfolio.
According to François Levasseur, artificial intelligence will soon make it possible to create a virtual agent based on the characteristics of a real advisor, who can take care of selling less complex products such as term policies. “Are customers ready for this? You have to ask yourself that question,” he says.
Roddy Awad thinks Mainville could already have his virtual assistant. “It's already there, we're just not using it yet.” In his opinion, one aspect not to be overlooked is the use of social networks. The advisor can devote time to preparing educational capsules on financial issues, in order to increase his or her visibility.
