The end of 2020 was a mixed bag for insurance and annuity sales.

Individual permanent life insurance sales fell at the end of 2020 to about $1.7 billion in the fourth quarter, well below the $2.5 billion in sales recorded in the fourth quarter of 2019, according to insurance industry analyst Wink. At the same time, individual annuity sales bounced back from a prolonged slump, rising to $56.3 billion for all deferred annuities in the fourth quarter of 2020, a 6% increase from 2019.

However, for much of the last decade insurance and annuity sales have been stuck in the doldrums, or on a decline, said Matt Essick, chief marketing officer at Ensight.

“The biggest problem for life insurance has been flat or declining sales, and there’s a number of factors that go into that,” said Essick. “One is that life and annuities is still a paper-based sector with very little adoption of advanced data analytics to help business owners understand what’s happening in the sales funnel and where the fallout is occurring.”

Ensight, an insurance fintech, or insuretech, that supports quotes, presentations, sales and data analytics across a cloud-based platform, has set out to solve that problem in complex insurance products like permanent life insurance, long-term-care insurance and annuities.

In a way, the company’s effort is akin to clearing, settling and fencing in a frontier, said Essick.

“Today, every financial services experience out there, whether it be angled towards an intermediary like financial planning software, or the 401(k) accounts we all experience, all the way to investment accounts, everything is consumer-centric and driven towards a digital experience,” he said. “The last bastion and area is what we would call insurance, and specifically, annuities, long-term care and permanent life insurance.”

Ensight is trying to create a unified digital experience for all practitioners involved in insurance sales, from carriers, sales desk staff, wholesalers, advisors and agents in the field, and the end client.

Such an experience is already available in the realm of term insurance, said Essick, where any consumer can log onto a website or mobile app, answer a set of questions, receive a quote and then purchase a policy of their choosing.

“Now, with more complex products we’ve merely moved from a world where we had 50 pages of compliance illustrations to a PDF with a lot of ledger data and a lot of compliance and legal language,” he said. “The actual experience hasn’t transformed for 50 years.”

Some of this has to do with the overall age of practitioners within the industry: The average insurance agent is around 58 years old, said Essick. There’s particular stagnancy in life and annuity sales because specialists in those types of insurance tend to be older and more experienced.

The complexity of selling the products keeps a lot of younger practitioners away, so incumbent technologies age without being significantly updated or replaced. Carriers, too, have been resistant to change.

“Any time you talk about engaging distribution from a carrier standpoint, there’s always hesitancy to move to a new model and there’s always concern about its impact on sales performance and other risks that may be associated with the move,” said Essick. “2019 and 2020 changed the discussion. Heads of distribution and sales are realizing that they bettered their performance with nobody on the road and a lot less spent in travel and entertainment.”

Of course, there were corresponding policy and economic trends that also weighed on life and annuity sales, noted Essick, not the least of which were an accommodative estate tax regime, a prolonged bull market in equities, and steady or declining interest rates.

But today, the insurance industry has to catch up with technology, said Essick, because consumers demand interactive and digital tools.

“More people today are self-service than ever before,” he said. “Millennials, Generation Xers are jumping into playing around with investment accounts and 401(k)s, and we need to support that type of engagement and environment for insurance as well and respect the fact that consumers are playing around with and analyzing these products themselves more. That’s become their expectations across every financial services product they use today.”

Essick notes that the oldest millennials today are 42 years old, close to the target age segment for many permanent life insurance products.

These consumers want a self-guided, educational journey, said Essick, not sales gimmickry and pressure.

“We need a big investment in self-service educational experiences,” he said. “We believe we are in an experience world. The apps we use don’t even bother to come with manuals anymore, because all the help and support is embedded in the user experience and interface. The same needs to be true for the financial services experience. Robinhood, Acorns—to some extent even Schwab—are there already. Apps need to be easy to use but also provide an element of play. They need to be interactive and support self-guided education.”

Digital distribution will disrupt the entire insurance industry, said Essick. The business will move permanently to a hybrid mode for sales, where a digital experience is augmented by more traditional face-to-face interactions. The practice of selling insurance across a kitchen table won’t go away entirely, he said.

“With digital distribution, we’re going to see the industry change dramatically over the next 10 years,” he said. “Some channels will end up being consumed by the move to go direct to consumer, others will remain with distributors but the distribution channels might look very different. New models are going to arrive, and there will be a wider spectrum of different products designed for all of these different channels. Carriers are going to have to increase their flexibility and their speed to the market.”

Other significant changes will be an end to most business travel and an end to events like sales dinners and lunch-and-learns.

All of these changes have been accelerated by the pandemic, said Essick.

“For agents and distributors, it means fewer miles logged and fewer in-person meetings,” said Essick. “For consumers, it just becomes a more efficient process. They want to engage over a hybrid environment. The old way is done after Covid.”