Transforming Life Insurance with Digital Marketing

In today's VUCA world, all industries, including Life Insurance, have undergone significant macro shifts due to the global pandemic, economic conditions, and geopolitical uncertainty. The advancement of technology has played a crucial role in changing customer expectations, with a growing demand for convenient, speedy, simplified, accessible, and engaging experiences. Moreover, the core audience for life insurance is shifting from Generation X to Generations Y and Z, each with unique expectations.

In Sri Lanka, a country that is becoming increasingly digital with an internet penetration of 53 percent in 2022, a social media penetration of 38 percent in 2023, and an increase in online payments from 3 percent in 2019 to about 6 percent in 2022, it is crucial to understand the behavior of younger generations, their motivations, aspirations, and their interactions with new-age technologies to adopt sustainable business growth.

Core Stages of Life Insurance

The fundamental stages of life insurance can be categorized as follows: first, the acquisition stage, which entails the company's approach to customer communications and touchpoint management during the onboarding process. Secondly, the servicing stage emphasizes how organizations engage with customers throughout the entire duration of their policy. Lastly, the claims stage examines the overall claims experience. Companies must establish robust processes and mechanisms that consistently deliver positive experiences across these stages, thereby ensuring an overall superior customer journey and facilitating the transformation of a significant majority of customers into net promoters.

1. Purchase and Acquisition: Reaching the Right Audience and Offering Relevance

Within the purchase stage, there are two key aspects: imparting the brand purpose and customer onboarding. Life insurance companies must provide effective communication that is relevant and clutter-breaking to convince customers of the value of protection. Today, customers seek simplified and easily accessible purchase journeys, with increasing reliance on online platforms for awareness and product research. As digital media consumption grows with generational shifts, social media becomes a crucial avenue to reach and engage with tech-centric customers. Developing a clear digital plan to connect with specific segments and leveraging the power of digital media can help overcome traditional limitations and penetrate new customer segments previously inaccessible. There is a watershed opportunity for the life insurance industry to take embedded insurance to the next level with the help of technology, going beyond the purchase stage in giving an enriching experience throughout the value chain.

“As the industry continues to evolve, life insurance providers should invest in well-thought marketing strategies that align with the changing customer landscape, ultimately ensuring sustainable growth and success in the digital era, while retaining the humanistic essence.”

2. Servicing: Embracing Digital for Enhanced Customer Engagement

Customer service is another critical aspect of any life insurance company's marketing strategy. Traditionally, Life Insurance has been perceived as less engaging, with minimal interactions between customers and the company post-purchase, except for claims. However, the evolving expectations of new customers, especially those from younger generations, demand higher levels of engagement and value additions beyond the traditional life insurance mandate. To address this, companies must leverage technology, digital tools, and analytics to provide personalized and engaging services. Equipping the sales force with the latest technology and empowering them to deliver a sophisticated customer experience is also crucial. Fulfilling experiences using digital assets and interactive platforms, can bridge the gap between customers and the company, fostering stronger relationships and customer loyalty.

3. Claims: Improving the Experience and Building Brand Consideration

The claims process is a vital component of the overall customer experience. It is at this stage that customers often assess the efficiency and reliability of their life insurance providers. Understanding the negativity bias among many, where more weight is given to negative experiences, life insurance companies should prioritize enhancing the claims experience through strategic digital marketing efforts to improve word-of-mouth. Customers today expect fast and hassle-free processes, often benchmarking their experiences across industries. Investing in digital tools, infrastructure, and innovative emerging technologies like AI, blockchain, RPA, bio-revolution, etc. can enable faster, more efficient, and more cost-effective claims processes. Collaborating with technology partners to achieve a superlative claims experience is crucial for gaining customer trust. A seamless claims process can be a differentiating factor, contributing to long-term brand consideration and customer loyalty.

Conclusion

Digital marketing has emerged as a catalyst for transforming the life insurance industry in Sri Lanka and worldwide. Embracing digital and marketing across the entire journey, from acquisition to servicing and claims, allows companies to create compelling experiences, build trust, and differentiate themselves from the competition. As the industry continues to evolve, life insurance providers should invest in well-thought marketing strategies that align with the changing customer landscape, ultimately ensuring sustainable growth and success in the digital era, while retaining the humanistic essence.