Life insurance companies are struggling with their current models. Since 2014, premiums for U.S. life insurers have fallen at an average annual rate of 4%, the industry’s return on equity has been flat, and persistently low interest rates continue to depress returns.
Agent commissions and distribution costs, which account for about 60% of a typical insurer’s overall operating costs, have ratcheted up at an average rate of 5% since 2010. The productivity of agents, who handle more than 90% of all policy sales, has slumped.
The average Net Promoter Score® for U.S. life insurers is 4.5%, according to Customer Behavior and Loyalty in Insurance: Global Edition 2017.
Digital is the future of promoting life insurance. For most life insurance companies that is a long transformation process. Leading insurers have begun to realize that digital is only a piece of the solution. To meet the challenges of the marketplace they need nothing less than a total transformation of the way they do business. Their tardiness in digital is symptomatic of a larger problem. They are steeped in organizational cultures that have been slow to embrace change.
Many companies discovered they were not spending their money wisely on their agents. What agents want more than regular visits from sales managers and incentives are tools that would help them become more productive in a digital world.
They have come up with other ways to target other demographics as well. The strategic business units, focused on customer segments, are now able to more quickly develop and launch new products. For example, the company recently introduced an innovative savings program geared to millennials.
Cosmo Insurance Agency is knowledgeable in various options including but not limited to – term, ROP, permanent and whole - from over two dozen A rated carriers. We are familiar with the rate classifications that particular carriers use to determine the health class of enrollees – and there are significant differences between them. No matter what the results of your medical examination are, we will find the insurer that will provide you will the best rating class and thus the lowest premiums.