The life insurance industry might be facing the biggest shake up it’s ever had.
Hundreds of thousands of Americans are employed, directly or as independent contractors, throughout the life insurance industry, and as many as 75% of them may see their job disappear sooner than they think.
How motivated are the biggest life insurance carriers? Eliminating this many jobs to artificial intelligence could save them upwards of $20 billion per year in commissions.
Is Artificial Intelligence Really Going To Take Over As Your Life Insurance Agent?
Technically speaking, it already has, to a degree. But now, it’s rolling out to the front lines, and may replace a vast majority of the non-specialized life insurance agent occupation.
Of the nearly 400,000 insurance related jobs, the largest percentage come from sales agents, agencies, brokerages and the carriers themselves.
By removing a large chunk of these agents and employing intelligent actuarial data, it not only relieves the direct sales positions, but many of the underlying positions, too. Those would include:
- selling support
- application teams
It’s already been happening over the past few years, and short of billionaire Mark Cuban’s remarks, who believes the insurance industry is about to spawn the world’s first trillionaire, few are even discussing it.
A Look At What Is Already Actively Working: A Broad Overview
Currently, AI can’t easily compete with jobs in Education, Law, Construction, Social Services, or even Art. These positions are hard to replicate and require human interaction (i.e., decisions, emotions, feelings, ethics).
Even though the medical field utilizes technology daily, AI is less likely to infiltrate any jobs which revolve around treating and caring for patients. The same goes for senior living facilities or most personal care services, as well.
Although personal robots are constantly in the works and may someday be a part of every household, it will be a harder sell in industries which rely on good judgment, fairness, and other human qualities.
The life insurance industry, while it has some of these qualities on the qualifying spectrum, is different; the quoting, reviewing and approving policies are not so.
Agents are already being pushed aside as progressive underwriting movements bypass their need for basic input, and even the entire approval process for healthier applicants.
However, industry experts don’t believe it’s just about the raw numbers anymore. “Big data and AI are already a big part of our lives, but the life insurance industry is still at least 10 years behind like usual,” says Nic West, founder of NinjaQuoter, a fin-tech and quoting software company who analyzed different consumer demographics and found price is not as relevant as most insurers and carriers think it is.
“Without data, we wouldn’t have been able to determine no medical exam products are a preferred way for middle market consumers buying life insurance.” says West.
The Process of Non-Medical Approvals Using Intelligent Data
Providing traditional life insurance can be a lengthy and expensive process for large companies. Before a company can offer life insurance, it typically has to work with an actuary.
An actuary, in short, does statistical modeling to assess risk. Since there are many factors to consider, actuaries had little competition until recently.
Additionally, insurance applicants needed to undergo a medical examination so underwriters could determine if they were healthy enough to be covered by an employer’s insurance plan.
However, rather than working with an actuary, a major tech company could use AI, instead, and buy actuarial data through software and devices.
This allows the initial application process to be done entirely between a consumer and a machine, and skips both the medical examination and underwriting process.
While it won’t completely eliminate all applicants passing through an underwriter, the healthiest would.
It not only offers convenience to the consumer, the insurance company would greatly benefit, a win-win for AI implementation.
In fact, several companies already have this process in working order.
And the insurance companies are, actually, only the tip of the iceberg.
It’s the creative use and depth of data provided by outside start ups who are making the biggest advances and pushing boundaries.
Non-Insurance Aggregators and Creators Using A.I. In Insurance
Companies, like Lapetus, have created easier, self-serving ways to get customized insurance more quickly and with no need for an actuary or underwriters.
Lapetus allows users to submit a “selfie, ” and the software will scan and analyze the picture. It attempts to determine several factors, such as age or tobacco use, which are all considered when selecting a life insurance plan.
There’s also no need to send employees in for a medical exam or waiting on results before moving forward with the insurance process.
Purchasing actuarial information, through AI, typically offers immediate results and can save a company at least hundreds of thousands of dollars a year, just on the salary of an actuary or underwriter alone.
Insurance Agents Better Adapt, Or Lose
One company who is already showcasing the power of technology and cutting out agents is Haven Life. With the ability for consumers to buy up to $2,000,000 of term life insurance, without using an agent, expect to see a big swing towards other insurers modifying their own underwriting practices.
Should consumers continue to expect the life insurance agent of old, in a face-to-face meeting? Likely not.
Just as it was predicted several years ago, the aging agents are already drifting out of the business, and, unless the younger ones adapt to the new, digital selling method, the career will drastically dwindle in the coming years.
As artificial intelligence grows more efficient and comprehensive, it’s difficult to see this as a career opportunity in the future.
The new opportunity lies not in the development of insurance agents, but in their removal.