The insurance industry is evolving rapidly, and so too must the process of selling these services. But adapting to the ever-changing market environment is challenging. A combination of factors, including increased competition, changes in consumer behaviors, and new technology means insurance agents are faced with a unique set of challenges.
Still, knowledge remains key to overcoming obstacles in business. That means having a thorough understanding of insurance, internet marketing, and probable future industry trends are key to your agency’s success. Here are some of the primary challenges with marketing insurance services today, as well as a few solutions.
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Low Lead Generation
Insurance agent marketing has a unique set of challenges. Firstly, prospects rarely self-identify a need for the services you offer. Unless they are forced to buy insurance, as with auto and home ownership, people are unlikely to show interest in insurance products. Sellers of life and health insurance no doubt recognize this challenge all too well.
Insurance agents need to be creative to overcome these challenges. When you consider the increased competition coming from online insurance companies like Warren Buffet’s GEICO, Flo’s Progressive, Liberty Mutual, USAA and more, staying creative and compliant are even more imperative. . Utilize online channels to initiate a proactive strategy to engage and educate your target market. That means using social media marketing, online advertising, and many other digital channels.
Another challenging aspect of lead generation lies in the reluctance of some agents to make the digital shift. Without a strong, focused online marketing efforlt your lead generation will be limited. You need to develop a sound online presence by incorporating good SEO practices, ensuring proper business listing management, and maintain a strong social media presence.
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The Economy
The economy is still on rocky terrain. Most consumers are acutely aware of that have adopted a budget-conscious mentality as a result. Most will be unwilling to consider anything that might appear to be frivolous spending. They will need to satisfy their conscience that the cost-benefit of the purchase is worthwhile. That can be a challenging sell, depending on the types of insurance you are selling.
These days, more than ever, it is crucial that you find ways to emphasize the benefits of purchasing an insurance product. The benefits help people justify the expenditure in their mind. That is not about overselling an insurance product; it’s about making sure that the product is a right fit for the client. Then the sell will be from a genuine urge to help the prospect improve their life.
The economy becomes almost irrelevant if the prospect is convinced that making a purchase will make solve a problem and make their life better. The job of the agent is to eliminate the fear that a low economy brings.
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Healthcare Reform
The Affordable Care Act of 2010 has caused massive disruption throughout the insurance industry. Amongst other things, the reform has caused much confusion amongst consumers. Some fear losing access to their preferred provider while others worry about the range of coverage options and whether they are, indeed, affordable.
Advisors are also at a loss. The changing regulations make selling health insurance less than straightforward. The whole process has felt like an uphill battle for agents. With commission structures becoming more complex (and in some cases dwindling), employers canceling group policies, and no clear-cut roles for health insurance agents, the challenges here seem insurmountable.
There are, however, many opportunities in what seems like a state of adversity for agents. You can overcome the challenge of the Affordable Care Act by altering your service offerings. You can do that by helping prospects navigate Obamacare, offering alternative solutions, or leveraging policy sales outside of open enrollment periods
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Industry Legislation and Regulation
The ascension of the DOL (Department of Labor) fiduciary standard upended the regulatory milieu that governs the insurance industry. Tighter regulations, as well as pending resolutions, have served to create uncertainty within the market. Moreover, it is certain that other tighter regulations will be introduced, which further deepens market uncertainties.
Clients do not have to adhere to regulations of the industry, but, nonetheless, they will feel some apprehension about the way the government regulates the insurance industry.
Here again, changes bring opportunities. As agents, it is important to keep a close eye on legislative changes. But do not become so obsessed with them that it interferes with your client-agent relationship. If changes force you to alter the way you offer services to your clients, you should try to ensure that remain open and honest with your clients.
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Changing Demographics
One of the biggest challenges facing insurance agents today is demographic complexities. Millennials are notoriously difficult to market insurance products to, with many of them considering things like life insurance low on their list of priorities. It’s not just life insurance sellers that are finding it challenging either. Across the board, the industry is struggling to get to grips with the changing demographics.
People are waiting longer to get married, society has become much more multicultural, and, according to PWC, the number of single-parent households has more than doubled since the early 1970s. All of this affects people’s need for insurance.
To overcome this, you need to identify specific pains within a target segment. Don’t try to reach everyone that you think can buy insurance. Instead, focus on solving insurance gaps for a smaller section of a bigger market and engage people. You can, for example, target only single parent households with women aged between twenty and thirty-five.
Most challenges seem insurmountable at first. The ones that insurance agents are faced with today are no exception. On closer inspections, however, what seemed like a major challenge might well turn out to be an opportunity.
