Takeaways:
- Applying technology to more available data improves underwriting
- Advisors play key role in generating product demand
- Life insurance has appeal as hedge against uncertainty
Matt Berman, president and CEO of Toronto-based life insurance company Foresters Financial, began his current role in January 2024.
He joined the company in 2017 and while serving as president of its U.S. operations
This article is excerpted from a longer interview and edited for clarity.
How are life insurers getting the most out of technology? Are they leveraging the data they collect?
Data has allowed for an immense amount of product innovation. The buying experience has accelerated quite a bit. The ubiquity of data in the U.S. market, and a life insurance company's ability to utilize data from traditional databases, is very basic. But the ability to pull information from electronic health records, the ability to create algorithms that can use the data as a proxy for mortality, allows life insurance companies to accelerate the buying experience so an individual can get underwritten very quickly. That has driven a fair amount of product innovation. It's driven a fair amount of innovation for the advisor as well.
Demand is, by and large, created by the advisor. The customer is the individual that's signing the check, but a critical partner in the experience is that advisor, and so we've invested in technology to create turnkey experiences for the advisors, so the ability for the advisor to prospect and onboard a potential client becomes very streamlined. The app intake process, pre-screening, underwriting, decisioning and issuance of the policy and getting the advisor paid quickly, will enable the advisor to actually build some scale in their practice.
Data and technology innovation have enabled the industry to now address the protection gap in the middle market. If we make it easier for the advisor, if we help on lead generation, if we help prospecting, onboarding, underwriting and getting the advisor paid, that advisor can now meet more customers each day. The real addressable opportunity in that protection gap is the middle market space.
How is technology being used to reach younger people with the need for life insurance?
Technology is having an impact, but in an indirect way. In the U.S., over the past 10 years, an interesting phenomenon has developed where distribution has grown and expanded beyond traditional models. You have a pretty significant sector in the intermediary space that has attracted younger advisors, that many would call multi-level network marketing. These organizations build deep recruiting hierarchies. They're extremely productive at prospecting agents, getting them trained and appointed.
There has been a fair amount of product innovation that has created these turnkey processes, and these organizations have done a fairly good job recruiting younger advisors. Those individuals, when they're licensed and appointed, naturally start prospecting their friends, their family.
Distribution creates a significant amount of demand. Indirectly, product innovation has emboldened new distribution models, and those distribution models have done a really good job attracting younger agents, and those younger agents attract younger customers.
What other catalysts drive product growth?
People want to participate in the upside of equity markets, but with mitigated downside risk. Life insurance companies can do that very effectively through product design. That drives demand and interest. The markets we're experiencing today, the news and geopolitical shifts create uncertainty. In times of uncertainty, life insurance companies provide stability. We're well capitalized businesses. We have big balance sheets, and we can aggregate risk and manage risk better than individuals and a lot of other organizations can.
There's a flight to stability when people sense uncertainty. Given the fact that we're fraternal and our common bond centers around well being, we offer community when times can feel divisive. Our unique ability to commercialize or to weave well being into the products in innovative ways can attract a spectrum of customers.
