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.