Case Study: Accelerating Digital Distribution in Life Insurance

The drive to modernize insurance distribution and sales through digital distribution has continued to accelerate significantly over the last 18 months. The pandemic moved many insurance consumers online, leading carriers to expand their use of digital technologies and explore partnerships with insurtechs to meet this need. COVID-19 is not the only transformation agent, however. Widespread consumer technology adoption and the increasing pace of technological change have set consumer experience expectations high. Insurers must maintain a balance between offering modern, technology-enhanced processes and retaining consumer trust through a personal connection, such as an agent.

The RGAX team has helped carriers accelerate their digital distribution journey, “meeting them where they are” and supporting them wherever they hope to go. This could include building a digital distribution channel from scratch, fine-tuning digital distribution to enhance sales, or devising a digital strategy through partnerships. RGAX provides structure and support to insurance companies wanting to accelerate their journey. By working through a methodology of hypothesizing and validating potential solutions, the team brings its innovation expertise paired with parent company RGA’s in-depth insurance knowledge and industry relationships. This combination supports carriers taking solutions to market as quickly as possible and increases the likelihood of success.

Enabling a start-to-finish innovation process for digital distribution

For example, a digital life insurance broker observed a weak link in its digital sales process: online insurance applicants abandoned their applications at unexpected rates when they left the company’s domain to begin the underwriting process. Since consumers are less likely to persist through disengagement or dissatisfaction, a seamless sales journey appropriate to the target customer is critical to digital success. The broker approached RGAX to explore creative solutions.

To help companies innovate new processes or products, our team of experts work with them to hypothesize a solution for their specific concerns, typically through a Life Design Sprint. In the case of the digital broker, the hypothesis was that a transparent, end-to-end process through both sales and underwriting would increase conversion rates. RGAX worked with them to detail a concept for that process that would be the digital broker’s own direct-to-consumer insurance product, developed through a partnership with a major carrier and supported by RGA as a reinsurance partner to share risk. The company could then stay with the consumer from the initial application process to issuing and underwriting the policy.

The next step in the innovation process is validation: bringing that concept forward to a group of industry experts relevant to the product, market, or technology under consideration and/or testing the concept with the target market. In most cases, after receiving feedback, RGAX and the innovation client determine whether the concept is viable and then make enhancements as necessary before bringing the product to market. In this scenario, a carrier client showed immediate interest during the validation stage.

From lightbulb to launch in seven months

The complete innovation cycle took just seven months. So far, their fully digital, direct-to-consumer life insurance product has cut the time to approval for most users. It typically takes two to four weeks for approval. However, in this case, some applicants are approved instantaneously, and the majority are approved within a 48-hour period. There has also been an 80% decrease in early lapses (policies that lapse in the first three months), contributing to an improvement in overall lapse rates. Since the digital channel offers consumers a transparent, end-to-end process from sales through to underwriting, they are less likely to abandon the sales process, which, in turn, increases conversion rates.

Bringing insurance capabilities, expertise, and potential partners together

This is just one scenario for a digital distribution journey—one that started from a business that was already fully online. In many cases, a carrier wants to establish a hybrid approach, facilitating a path that starts with a customer’s first online search and then guides that customer seamlessly to a product and buying experience that matches their needs and preferences, which could include forming a relationship with an agent. Some carriers want to target a niche market through digital distribution channels, using data insights to inform a personalized sales process.

RGAX, together with RGA, enable companies to accelerate that digital journey, bringing a wide range of capabilities to the table, including underwriting staffing and technologies, product and pricing design, process automation, risk evaluation and management, and digital distribution. With our combined expertise in market research, product development, distribution models, and go-to-market strategy, we are well-positioned to help carriers and distributors create, test, and deliver scalable digital offerings on an expeditious timeline using a proven, repeatable innovation methodology. With a wide range of partnerships, our team can connect the dots among carriers, insurtechs, investors, and related partners to facilitate further innovation and growth.

Finally, with the data insights and process learnings RGAX has acquired as a provider and digital distribution facilitator, especially in the direct-to-consumer market, we continue to optimize our solution innovation model. The transformation of the insurance industry is well underway, and we are prepared to help other insurers and distributors contemplating an evolution in their digital distribution strategy. Connect with RGAX to get started.

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