As much as the life insurance industry has stayed relatively consistent over the years, there are always shifts that independent insurance agents need to keep apprised of which can impact the way they do business. This is why staying ahead of life insurance trends is important.
Keeping up to date with trends and world events that impact the life insurance industry as an independent insurance agent can be challenging. However, doing so helps you better develop strategies for your clients and ensure their needs are met more thoroughly.
By understanding up-and-coming movements in the field, you’ll be able to serve your clients more effectively in 2024 and beyond—ensuring your life insurance policies remain relevant, valuable, and attractive to buyers regardless of whatever changes may hit the market. Let’s cover some of the key insurance industry trends agents will need to keep an eye out for.
Quick Links
- What Are Life Insurance Trends?
- How Do Life Insurance Trends Impact the Market?
- How Can Independent Insurance Agents Leverage Trends?
- Life Insurance Trends to Watch in 2024
What Are Life Insurance Trends?
The word “trend” can have a few different meanings. It can indicate a direction, a new fashion, or a change or development in an industry. Life insurance trends fall under the third meaning—a change or development in an industry that can affect how agents in the industry operate. By analyzing what we’ve learned in the past year, we can make decisions about what to expect as we enter a new phase of life insurance trends.
These trends can come from numerous sources. For example, trends can be driven by new technologies, shifts in customer demographics, changes among the largest insurance providers, or regulatory initiatives from lawmakers.
How Do Life Insurance Trends Impact the Market?
Life insurance trends can impact the market in a variety of ways. Some trends can leave independent life insurance agents scrambling to take advantage of new opportunities in the market. Others might necessitate the adoption of new internal processes to keep up with consumer demands or industry regulations.
Changes in the life insurance landscape can depress new policy sales or cause a surge in a particular type of policy. For example, as noted by Broker World, “The industry is feeling the effects of the pandemic, not to mention rising inflation and related inflation-driven pressures on disposable income as well as rising interest rates.” This can make it more difficult for insurance agents to sell insurance policies as prospective buyers have fewer funds available and life insurance policy premiums have to be adjusted to keep policies profitable.
Additionally, online tools are becoming another challenge for independent agents. We’re seeing more buyers looking at online platforms rather than going directly to agents for help. This means that agents who are more specialized in a certain type of policy or product option will excel by being a knowledgeable resource for clients to turn to, especially when they struggle to find the information they need.
How Can Independent Insurance Agents Leverage Trends?
Independent insurance agents can leverage trends in the industry to accomplish a few different things, such as:
- Capturing Underserved Markets: If there is a trend creating an underserved market in the insurance industry, independent agents can leverage that knowledge to target the underserved market themselves—capturing sales that others may miss.
- Future-Proofing Insurance Policies: Knowing if or when a major change is coming to the industry is key to preparing for it. With foreknowledge of changes in insurance rates or new regulations affecting insurers, agents can modify policies to account for these changes before they occur—helping to reduce the impact of the change on operations when it occurs. This, in turn, helps the agent avoid complications at a time when others might be struggling to adapt.
- Adjusting to Meet Consumer Expectations: We are fully in the digital age. Modern consumers expect a certain level of convenience in their interactions with insurance agents and brokers alike. By shifting their business model to take advantage of online resources, agents can capture customers who would be left behind by more traditional sales and marketing.
- Identifying More Valuable Partnership Opportunities: Finding the best products to offer clients is important to grow revenue. Identifying trends in consumer preferences early on can help independent life insurance agents identify the best products to add to their portfolio and offer to their clients across every stage of the customer lifecycle.
These are just a few of the potential ways to leverage insurance industry trends as an independent agent. The specific strategies that insurance agents will want to employ will depend on the insurance industry outlook and the nature of the trends that emerge.
Life Insurance Trends to Watch in 2024
So, what are some of the major life insurance industry trends agents should keep an eye out for in 2024? A few of the major trends include:
1. Embedded Life Insurance
Fintech Global reports that “Meeting consumers where they are is key to reaching new customers and reducing the life insurance need-gap.” One method of accomplishing this is offering embedded life insurance policies wherein life insurance is bundled with other products—sometimes as an optional add-on or feature and sometimes as a mandatory part of the other product.
This may mean that independent insurance agents will need to compete with a new class of companies that are now bundling life insurance with their other products. These competitors will be offering their life insurance products to consumers during their regular sales process for other products and potentially catching consumers in a more agreeable state of mind for making the purchase.
Mimicking this behavior and offering bundled insurance policies that combine life insurance with other forms of insurance (such as health insurance, preneed funeral insurance, etc.) could be one way for some insurance agents to expand their revenue opportunities with existing prospects.
2. Social Media as a Knowledge Source
While we want our clients to turn directly to their insurance agents as experts, the reality of the matter is that many people, particularly Gen Z and Millenials, are using social media to learn about financial literacy. The problem here is that the information shared online isn’t always accurate and many people don’t know what to look for.
Fortunately, this provides an excellent gateway for insurance agents to leverage social media to their advantage. According to the 2023 Insurance Barometer Report by the Life Insurance Marketing and Research Association (LIMRA), 60% of Gen Zers seek financial advice on YouTube, 53% on Instagram, and 41% on TikTok. So, insurance agents that focus on social media as a means of informing their audience can help ensure that accurate information is readily available online.
3. Risk Awareness
Rather than waiting for disaster to strike, more insurance providers are acting proactively to ensure the security of their policyholders. If life insurance is intended to act as a financial safety net, then insurance companies need to take action to prevent losses before they occur.
With the digital age, it comes as no surprise that this is a concern for policyholders. Many consumers are concerned about what information they share with companies and how well they can trust those companies to keep their information safe. By mitigating risks, insurance agents can build trust and stronger relationships with their clients in order to find products that align with what they need from a life insurance policy.
4. Rising Insurance Premiums
The cost of insurance is on the rise globally. As of December of 2023, the average monthly premium for 50-year olds with a term life insurance policy is $40 a month, according to Forbes. In Q2 2022, global insurance prices rose 9%—the 19th consecutive quarterly rise. This contributes to market hardening as consumers don’t have the disposable income to spend given that, after adjusting for inflation, wages for the average American have remained largely stagnant since 1964 (source: Pew Research Center). In 1964, an hourly wage of $2.50 would be roughly equivalent to a wage of $25.79 in 2024.
In 2023, the average salary of a U.S. worker was around $53,490/year. This equates to roughly $25.70 per hour assuming a 40-hour work week with no PTO. This makes life insurance inherently less affordable when premiums go up. With costs rising for insurance agents, brokerages, and others within the industry, it will be harder to offer products that align with the customer’s budget and needs.
One option would be to offer whole life insurance policies where the insurance never expires and continually provides cash value that these clients may find attractive.
5. AI Tools
Consumers are looking for solutions to their problems, and they want those solutions to be delivered as quickly as possible. Fortunately, artificial intelligence (AI) can help with this. Not only can AI help quickly complete processes for insurance agents, but they can also be used for virtual assistance and client experiences.
Independent insurance agents can use AI to create “individualized and empathetic human interactions,” according to Ernst and Young. For simple requests from clients, an insurance agent can use generative AI to help deliver or process information while they focus on more complex issues.
While AI tools still need to be vetted for accuracy and ability to follow simple text commands, the future is bright for what it can bring to the insurance industry.
6. A Shift to Digital Interactions with Clients
Modern consumers are becoming increasingly familiar with (and reliant on) the internet and smart devices. For example, according to Pew Research, 85% of American adults own a smartphone—and roughly three-quarters of adults in the U.S. report using a smartphone for shopping.
To sell life insurance policies more effectively, agents may need to enhance their digital capabilities—including creating mobile-friendly websites for the products they offer. This can help to capture the majority of American customers that do their shopping from their handheld device on a daily basis.
ELCO Mutual is proud to support independent insurance agents by providing marketing resources to help them sell their life insurance policies. From dedicated support staff to consistent product training and education, we help ensure agents have what they need to drive revenue for their agency.
Contact us to learn more about our life insurance products and how we can help you delight your clients.
