not so much about selling.”
In fact, Greenberg spends almost no time on selling activities
these days. His wholesaler handles all of his case management, and
his one employee answers the chat requests, emails and telephone
calls that come through the websites. “I sold 500 policies last year
for the same amount of work that a traditional agent would sell 50
… maybe less,” he says.
Greenberg admits that what he sells — mostly simple term
and universal life products, nothing that has an investment element — isn’t a good fit for all clients and their needs. But
he sees his market continuing to grow all the same. “
Everyone’s got an iPad; everyone’s got high-speed Internet,” he says.
“They’re going to go online.”
The online trend
Experts tend to agree with Greenberg.
According to an analysis by PricewaterhouseCoopers (PwC),
61 percent of consumers between the ages of 18 and 54 find
purchasing life insurance online attractive, and 8 in 10 life insurance purchases these days start online. It’s a trend that will likely
accelerate as younger generations — self-service aficionados
who are among the most eager to purchase online — continue to
come of buying age.
“Younger generations want information to be interactive, and
they want it in bite-size pieces,” says Anand S. Rao, principal, In-
surance Advisory Services, at PwC. “They don’t necessarily want
to meet face to face.”
And as medical information becomes increasingly digitized, they
won’t have to. “One of the biggest impediments [to buying online]
is this notion around medical underwriting,” Rao says. (Greenberg
agrees. The majority of his customers opt for non-medical products
even though they’re more costly.)
But health care reform has pushed providers to adopt electronic
medical records, giving more people access to their health information — and the ability to share that information with insurers. “As
that takes hold in the next two to three years, then people will have
the option to basically have all the info online and make it available
to the insurance carrier,” Rao says.
Term insurance will likely lead the online sales charge — PwC
estimates $9 billion of the $14 billion term market has direct-dis-tribution potential — but other products, simplified for the online
marketplace, will follow, Rao says.
“Right now, you have so many different riders and add-ons
that you end up confusing consumers and then they push off
their decision,” he says. “And this is more or less how the industry has been justifying the need for agents and advisors. It’s
a sort of vicious cycle, and we think, more and more, we’ll see
carriers offering something more simple for the consumer, and
that will move more sales online.”
Carriers vs. agents?
Forecasts like Rao’s don’t necessarily bode well for agents —
and even web-savvy Greenberg admits he’s a little worried about
the future. “My biggest concern is just more people using the
technology I’m using, more competition from other agents and
carriers,” he says.
Who would win a battle for online insurance dollars? It’s anybody’s game at this point, but Rao’s betting carriers will have the
upper hand in the United States, noting that U.S. consumers continue to buy their online auto insurance from carriers while customers
in the U.K. almost always go through aggregators.
“My bet would be more life insurance carriers here will start offering [price comparison programs and other tools] online, so as not
to give up the business to the aggregators,” he says.
Greenberg won’t prove an easy foe, though. He plans to continue
growing his website — offering more non-medical options and
adopting technologies that speed the underwriting process as soon
as they become available.
“The insurance industry is very antiquated, very paper-depen-dent,” he says. “So whenever someone comes up with a technology
to make it easier or faster, I’m always going to be a first adopter in
that regard. If it helps, I’m going to use it.”
Corey Dahl is managing editor of Life Insurance Selling and the
life channel and social media editor on LifeHealthPro.com.
Direct selling, by the numbers
potential market share for
direct term life
$8.9 billion —
are sold direct; analysts
between 18 and 54 find
estimate 63% will be
direct by 2015.
37% of term
purchasing life insurance
61% of customers