Underwriting is the most important component of life insurance. In order to be successful and remain viable, life insurance companies must successfully cover mortality risk and do a great job at risk pooling and risk evaluation so they can price each risk appropriately. Pricing risks wrong can be disastrous and threaten the long-term viability of the organization. In the short term, carriers might sell more policies if they price risks wrong, but failing to price risk correctly and create the right blend of risk diversity in a risk pool can lead to bankruptcy.


Today’s marketplace is very complex, and while life insurers are selling many policies to high-end customers, they are underserving the lower and middle markets.  There seems to be no viable product or viable way of distributing products to these individuals, who could benefit from buying coverage. The products just aren’t priced appropriately for this segment.


Life insurers rely on new customers to grow, and reaching – and selling to – the lower and middle segments has the potential to significantly increase the number of insureds. However, finding prospective customers and bringing them aboard is anything but simple. Conventional life insurance sales are costly and inefficient. Customer acquisition costs are too high, and customer conversion ratios are too low. What’s more, the application process is far from instantaneous and prospective customers typically have to wait a long time for the carrier to approve their application.


At the same time, the operating environment and marketplace are changing. The life sales channel that has been in place for many years is optimized for higher-income customers, and agents don’t have much incentive to pursue mid-market customers. Millennials, the next generation of life insurance customers, prefer to shop online for products and services. However, this segment hasn’t had many options for acquiring life insurance via their preferred channel. Unable to properly reach this large and growing segment, life insurers are missing out on a tremendous opportunity.


Changing the way customers apply for life insurance is a game-changer for carriers. Customers are now demanding a simple, intuitive application and buying process that meets their demand for a seamless, online purchasing experience and eliminates the long wait for an approval, maximizing conversion rates. Unfortunately, legacy technologies and teams cannot always adapt to this environment quickly and cost-effectively. However, it’s essential for life insurers to optimize the application process to meet the expectations of younger and mid-market customers and at the same time, the process must be efficient and cost-effective for insurers to implement.


Based on the SE2 Aurum Platform, SE2 Digital Direct Life enables insurers to offer customers an easy-to-use way to shop and apply for life insurance, providing a near-instant response to online applications to improve the buying experience and increase sales. And because SE2 Digital Direct Life is offered as-a-service, the solution also makes it simple for life insurers to quickly and cost-effectively enter new markets with no risk, minimal development and little training.


Vinod Kachroo, Chief Information Officer, SE2
LOMA Resource Magazine, October 2017