When my co-founder and I were fleshing out the foundation of PolicyGenius, we knew our goal was to bring the insurance-buying process -- from education to shopping to application -- to the modern online consumer. The question was, "How do we do this?" And as we spoke to consumers about their decision journeys, we realized that the answer wasn't new. It had been around for 30 years.
Time after time, unprompted, we'd get asked why there wasn't something like TurboTax for insurance.
TurboTax helped pioneer robo-advice in household finances by offering expert-level guidance without requiring a face-to-face appointment with a specialist. It showed that it could be done for a complex financial process (there isn't anything more complicated than filing your taxes, is there?) and now robo-advisors are taking over the investing world thanks to the likes of Tradeking, Wealthfront, Betterment, and more.
eep
So the people we wanted to reach wanted TurboTax for insurance: something where they could go through the insurance shopping process -- the whole process -- online, getting guidance that they could follow at their own pace.
Here's what we learned by building it.
You can't be just an aggregator.
You can find and compare insurance policies on PolicyGenius, so it's tempting to describe the process as like "Kayak, but for insurance." But unlike travel aggregators, we don't just gather a bunch of deals and show them side-by-side on the screen. We can't. Insurance is more complicated than flights, so we have to do more.
When you go on vacation you buy your plane ticket, go on the trip, post the pictures to Facebook, and go back to your life. Insurance, especially life insurance, is more expensive, longer-term, and more complex. Choosing the wrong flight means you have to wake up early or have no legroom, but messing up your insurance policy has real consequences. That's why we emphasize education and decision support.
We built a resource center with content that explains different concepts, terms, and scenarios. During the application process, we explain why we're asking for each piece of information. And with our Insurance Checkup, we show you not only what sort of protection you need, but why you need it.
For a lot of people, shopping online for insurance means plugging your personal information into a form and waiting to get called by a horde of salespeople. That's not a good experience. Customers don't want to just be added to a call list. They're trying to protect the wellbeing of themselves and their family; being little more than a stepping stone for a salesperson to get closer to their quota isn't reassuring. Instead, we gave people a full shopping experience: go from research to application at your own pace, and only give up your contact information when you're ready to take the next step in completing your application.
Related: How to Start a Business With (Almost) No Money
And insurance isn't something that people think about all the time. That means you have a limited window to reach (and keep) them. How do you make the most of that time? By giving them all of the information and tools they need to go through the whole process upfront without needing to jump through hoops. In other words, don't waste their time. Showing them the opportunity and value of life insurance through educational content and an easy-to-use process gives users the confidence that they can buy a policy without hassle and benefit from it for years to come.
People will do more than you think they will.
It's easy to write off digital experiences as only being appealing for Millennials. And even though Millennials make up half of our customer base, that means that half of our users are from older, more affluent segments - and yet they still use and enjoy our digital experience. Remember, they've lived most of their lives in a world where TurboTax is the way millions of people do their taxes. They're not new to this.
Where do you integrate robo-advice? Wherever you can in the funnel - which, as it turns out, is every step.
funnel.png
For example, we customize content and advice so that we're giving customers relevant information. Even though the advice is "robo" that doesn't mean it's impersonal. If you can translate the type of advice a human insurance agent would deliver in the "kitchen table conversation" into an algorithm, then you can deliver tailored advice in a self-service, automated fashion. That's what our Insurance Checkup does: in five minutes customers can find out exactly what type of coverage they need based on their financial situation.
It doesn't stop there, though. We provide instant, accurate, automated quotes with advanced underwriting techniques; at the evaluation stage, we've built plain-English content and decision-support features that answer the most important questions insurance shoppers have; our insurer report cards highlight all the ratings and customer "moments of truth" essential for the purchasing decision. Step by step, we make learning about, applying for, and purchasing insurance easy and self-directed.
And what happens when you put robo-advisor tools in place in the funnel? More than you'd think.
Related: Habits of the World's Wealthiest People (Infographic)
Our customers spend a lot of time on the research and decision-making steps of the process because we've given them personalized content to dig through. They answer a lot of high-friction questions to get accurate quotes (more questions than a typical UX/UI designer would think is possible) and spend upwards of 10 minutes on our site per transaction. There's only a few days between when they begin the process and when they finish their application, and a vast majority of our users do finish their application once they start - enough that we've seen 20% month-over-month growth when the rest of the life insurance industry has stayed relatively flat. We've done this by enabling people to buy life insurance the way they want to: with plenty of advice, on their own terms, instantly.
Robo-advice isn't a one-size-fits-all tool.
We aren't all suited for robo-advice just yet. Whether it's because we're concerned about the security implications of entering all of our financial information online or we just like having an expert sit down with us and answer questions in real life, an agent works better for some people.
Although we've been able to reach across generational gaps at PolicyGenius, studies show that older generations (sorry 35 year olds, you're an "older generation" now) are more likely to prefer a face-to-face experience at some point, while younger people are more comfortable with a fully online process - according to an AXA survey 34% of Millennials want to interact with their insurer solely online, and 8% don't want to interact with them at all.
But it's not just an age thing. Whether or not people want to apply for life insurance online depends on their needs and their do-it-yourself orientation; where they fall on that spectrum dictates where you can fit robo-advisor tools into the process to make their experience as seamless as possible.
2x2.png
On one end, you have someone with simple needs -- they just want a pretty straightforward life insurance policy, for instance -- and they're comfortable going through it themselves; you can automate every step of the process, from education all the way through to checkout. They don't have to talk to a single person if they don't want to.
Then you get to people who want to do it on their own but need an agent due to their financial situation: high net worth consumers with complicated estate planning needs are probably better served with a personal advisor at some point in the process.
The inverse of the latter customer is the consumer who wants (more than needs) an agent but it may not be feasible for them to be supported every step of the way because it's not cost-effective for the agent to handle every step of the process for them. For these customers, you can complement their journey with robo-advisor tools -- let them go through as much as they can on their own and having an agent step in only when necessary so the agent doesn't have to invest too much in time or resources for a simple policy.
And finally, at the other end of our spectrum, there's the traditional agent model for anyone who doesn't want to go through the process alone or has complicated needs that an experienced professional can help with. 69% of respondents to a recent Allianz survey said they don't trust advice found online, so they'd rather work with an agent than a robo-advisor -- so there's still a market out there for them.
The life insurance industry has been around for a long time. We're not going to revolutionize it overnight. We don't have to, and we don't want to -- it's a large, complex industry, and a lot of people still find value in the way it currently works. But we shouldn't fight the tools and technology that are available to us, and implementing robo-advisors is one of the incremental changes we can put in place to make buying life insurance easier for everyone.
It may be because we are natural optimists, but it is remarkably common for entrepreneurs not to take out life insurance. In fact, according to LIMRA’s Life Insurance Barometer study, 41 percent of business owners and individuals do not have life insurance, meaning they likely don’t have the necessary funds earmarked to support their business, employees and their loved ones in the event that something happens to them.
Entrepreneurs have a unique mindset and perspective that sets them apart from other professionals or even artists. Their company is born with a mission in mind, and this creates individuals who tend to be both persistent and impatient, yet disciplined. When launching a business, entrepreneurs are supported by investors, teams and their families who all share in their company’s vision, but these groups are also the most at risk should that vision be cut short by an unforeseen event. Without proper life insurance protection, the sudden death or disability of a founder could derail a company, resulting in layoffs, bankruptcy and possibly the collapse of the business itself.
There are various reasons that entrepreneurs may neglect to take out an adequate life insurance plan. Establishing protection for themselves is rarely a top priority when starting a business, as finances are stretched and owners are subject to a never-ending to-do list.
Related: 7 Types of Insurance You Need to Protect Your Business
When I started BizEquity, I was newly married and knew that I was going to be bootstrapping my business. I also knew that, like many other entrepreneurs in my position, at the onset, my income would be non-existent. As with most small business owners, I’d be drilling into my own savings in order to invest in my venture. Yet, I was determined that somehow, some way, I was going to make my business work -- and the only thing that could get in my way was time. In order to feel good about risking my short-term financial future, I knew I couldn't put my new family -- including my wife, dog Briggsy and future children -- at risk.
No one likes to think about the unexpected events that could occur, such as an injury, disability or even death, to yourself or a business partner, but a good business person should anticipate all possibilities whether they are positive or negative. However, we should as entrepreneurs recognize that from the onset we are putting ourselves, our business and our family at risk if we fail to take out adequate insurance. From a business perspective, it’s a smart idea to take out life insurance, which can protect your company from financial loss, liabilities or instability in the case of death. It can also assist you in maintaining your business through turbulent times, by providing short-term cash flow, keeping your operations running and suppliers happy.
From a personal perspective, life insurance is one of the best decisions you can make on behalf of your family, yet Deloitte found that only 59 percent of family-owned businesses have a detailed contingency plan in the case of death or disability. In my case, it gave me great peace of mind as I built my business knowing that my family and my legacy would be protected should the worst happen to me.
Related: 3 Expert Tips to Lowering Your Insurance Costs
Just like buying a tailored suit, a life insurance police should be a good fit, reflecting the scope and scale of your business. To that end, when purchasing life insurance, business owners need to evaluate their individual insurance needs based on a number of factors, including their level of debt, income replacement and future obligations. One of the main reasons that U.S. business owners are underinsured and 41 percent don’t have life insurance is that they do not know how to adequately measure their financial risk. This is where entrepreneurs should seek help, as being unaware of vital financial measurements, including the value of their business, leads to business owners receiving inadequate cover or no cover at all. What’s worse, when a company is underinsured, any claims pay-outs will be insufficient to help get the business back on its feet.
Luckily, advancements in technology and big data now provide business owners and advisors with accurate and reliable business valuations that help to identify an adequate level of insurance coverage. Using digital valuation tools, the industry now has the means to evaluate business valuation data with actual underwritten insurance policies, historical insurance trends as well as the industry’s best practice, generating a holistic report.
Related: It's Time to Check Up on Your Insurance Policy
Just as no entrepreneur is the same, no startup is the same. It begins with a thorough understanding of how much insurance they actually need based upon their business value and their equity stake in that business. Armed with this information, entrepreneurs can accurately incorporate vital components into their insurance plan, including buy/sell, key person, life, disability, and property and casualty, to help establish a safe and secure business.
This will also give entrepreneurs peace of mind that their business and loved ones are covered, and provide them with the satisfaction of being able to cross off one more task on that never-ending list of jobs to be done.
Time after time, unprompted, we'd get asked why there wasn't something like TurboTax for insurance.
TurboTax helped pioneer robo-advice in household finances by offering expert-level guidance without requiring a face-to-face appointment with a specialist. It showed that it could be done for a complex financial process (there isn't anything more complicated than filing your taxes, is there?) and now robo-advisors are taking over the investing world thanks to the likes of Tradeking, Wealthfront, Betterment, and more.
eep
So the people we wanted to reach wanted TurboTax for insurance: something where they could go through the insurance shopping process -- the whole process -- online, getting guidance that they could follow at their own pace.
Here's what we learned by building it.
You can't be just an aggregator.
You can find and compare insurance policies on PolicyGenius, so it's tempting to describe the process as like "Kayak, but for insurance." But unlike travel aggregators, we don't just gather a bunch of deals and show them side-by-side on the screen. We can't. Insurance is more complicated than flights, so we have to do more.
When you go on vacation you buy your plane ticket, go on the trip, post the pictures to Facebook, and go back to your life. Insurance, especially life insurance, is more expensive, longer-term, and more complex. Choosing the wrong flight means you have to wake up early or have no legroom, but messing up your insurance policy has real consequences. That's why we emphasize education and decision support.
We built a resource center with content that explains different concepts, terms, and scenarios. During the application process, we explain why we're asking for each piece of information. And with our Insurance Checkup, we show you not only what sort of protection you need, but why you need it.
For a lot of people, shopping online for insurance means plugging your personal information into a form and waiting to get called by a horde of salespeople. That's not a good experience. Customers don't want to just be added to a call list. They're trying to protect the wellbeing of themselves and their family; being little more than a stepping stone for a salesperson to get closer to their quota isn't reassuring. Instead, we gave people a full shopping experience: go from research to application at your own pace, and only give up your contact information when you're ready to take the next step in completing your application.
Related: How to Start a Business With (Almost) No Money
And insurance isn't something that people think about all the time. That means you have a limited window to reach (and keep) them. How do you make the most of that time? By giving them all of the information and tools they need to go through the whole process upfront without needing to jump through hoops. In other words, don't waste their time. Showing them the opportunity and value of life insurance through educational content and an easy-to-use process gives users the confidence that they can buy a policy without hassle and benefit from it for years to come.
People will do more than you think they will.
It's easy to write off digital experiences as only being appealing for Millennials. And even though Millennials make up half of our customer base, that means that half of our users are from older, more affluent segments - and yet they still use and enjoy our digital experience. Remember, they've lived most of their lives in a world where TurboTax is the way millions of people do their taxes. They're not new to this.
Where do you integrate robo-advice? Wherever you can in the funnel - which, as it turns out, is every step.
funnel.png
For example, we customize content and advice so that we're giving customers relevant information. Even though the advice is "robo" that doesn't mean it's impersonal. If you can translate the type of advice a human insurance agent would deliver in the "kitchen table conversation" into an algorithm, then you can deliver tailored advice in a self-service, automated fashion. That's what our Insurance Checkup does: in five minutes customers can find out exactly what type of coverage they need based on their financial situation.
It doesn't stop there, though. We provide instant, accurate, automated quotes with advanced underwriting techniques; at the evaluation stage, we've built plain-English content and decision-support features that answer the most important questions insurance shoppers have; our insurer report cards highlight all the ratings and customer "moments of truth" essential for the purchasing decision. Step by step, we make learning about, applying for, and purchasing insurance easy and self-directed.
And what happens when you put robo-advisor tools in place in the funnel? More than you'd think.
Related: Habits of the World's Wealthiest People (Infographic)
Our customers spend a lot of time on the research and decision-making steps of the process because we've given them personalized content to dig through. They answer a lot of high-friction questions to get accurate quotes (more questions than a typical UX/UI designer would think is possible) and spend upwards of 10 minutes on our site per transaction. There's only a few days between when they begin the process and when they finish their application, and a vast majority of our users do finish their application once they start - enough that we've seen 20% month-over-month growth when the rest of the life insurance industry has stayed relatively flat. We've done this by enabling people to buy life insurance the way they want to: with plenty of advice, on their own terms, instantly.
Robo-advice isn't a one-size-fits-all tool.
We aren't all suited for robo-advice just yet. Whether it's because we're concerned about the security implications of entering all of our financial information online or we just like having an expert sit down with us and answer questions in real life, an agent works better for some people.
Although we've been able to reach across generational gaps at PolicyGenius, studies show that older generations (sorry 35 year olds, you're an "older generation" now) are more likely to prefer a face-to-face experience at some point, while younger people are more comfortable with a fully online process - according to an AXA survey 34% of Millennials want to interact with their insurer solely online, and 8% don't want to interact with them at all.
But it's not just an age thing. Whether or not people want to apply for life insurance online depends on their needs and their do-it-yourself orientation; where they fall on that spectrum dictates where you can fit robo-advisor tools into the process to make their experience as seamless as possible.
2x2.png
On one end, you have someone with simple needs -- they just want a pretty straightforward life insurance policy, for instance -- and they're comfortable going through it themselves; you can automate every step of the process, from education all the way through to checkout. They don't have to talk to a single person if they don't want to.
Then you get to people who want to do it on their own but need an agent due to their financial situation: high net worth consumers with complicated estate planning needs are probably better served with a personal advisor at some point in the process.
The inverse of the latter customer is the consumer who wants (more than needs) an agent but it may not be feasible for them to be supported every step of the way because it's not cost-effective for the agent to handle every step of the process for them. For these customers, you can complement their journey with robo-advisor tools -- let them go through as much as they can on their own and having an agent step in only when necessary so the agent doesn't have to invest too much in time or resources for a simple policy.
And finally, at the other end of our spectrum, there's the traditional agent model for anyone who doesn't want to go through the process alone or has complicated needs that an experienced professional can help with. 69% of respondents to a recent Allianz survey said they don't trust advice found online, so they'd rather work with an agent than a robo-advisor -- so there's still a market out there for them.
The life insurance industry has been around for a long time. We're not going to revolutionize it overnight. We don't have to, and we don't want to -- it's a large, complex industry, and a lot of people still find value in the way it currently works. But we shouldn't fight the tools and technology that are available to us, and implementing robo-advisors is one of the incremental changes we can put in place to make buying life insurance easier for everyone.
It may be because we are natural optimists, but it is remarkably common for entrepreneurs not to take out life insurance. In fact, according to LIMRA’s Life Insurance Barometer study, 41 percent of business owners and individuals do not have life insurance, meaning they likely don’t have the necessary funds earmarked to support their business, employees and their loved ones in the event that something happens to them.
Entrepreneurs have a unique mindset and perspective that sets them apart from other professionals or even artists. Their company is born with a mission in mind, and this creates individuals who tend to be both persistent and impatient, yet disciplined. When launching a business, entrepreneurs are supported by investors, teams and their families who all share in their company’s vision, but these groups are also the most at risk should that vision be cut short by an unforeseen event. Without proper life insurance protection, the sudden death or disability of a founder could derail a company, resulting in layoffs, bankruptcy and possibly the collapse of the business itself.
There are various reasons that entrepreneurs may neglect to take out an adequate life insurance plan. Establishing protection for themselves is rarely a top priority when starting a business, as finances are stretched and owners are subject to a never-ending to-do list.
Related: 7 Types of Insurance You Need to Protect Your Business
When I started BizEquity, I was newly married and knew that I was going to be bootstrapping my business. I also knew that, like many other entrepreneurs in my position, at the onset, my income would be non-existent. As with most small business owners, I’d be drilling into my own savings in order to invest in my venture. Yet, I was determined that somehow, some way, I was going to make my business work -- and the only thing that could get in my way was time. In order to feel good about risking my short-term financial future, I knew I couldn't put my new family -- including my wife, dog Briggsy and future children -- at risk.
No one likes to think about the unexpected events that could occur, such as an injury, disability or even death, to yourself or a business partner, but a good business person should anticipate all possibilities whether they are positive or negative. However, we should as entrepreneurs recognize that from the onset we are putting ourselves, our business and our family at risk if we fail to take out adequate insurance. From a business perspective, it’s a smart idea to take out life insurance, which can protect your company from financial loss, liabilities or instability in the case of death. It can also assist you in maintaining your business through turbulent times, by providing short-term cash flow, keeping your operations running and suppliers happy.
From a personal perspective, life insurance is one of the best decisions you can make on behalf of your family, yet Deloitte found that only 59 percent of family-owned businesses have a detailed contingency plan in the case of death or disability. In my case, it gave me great peace of mind as I built my business knowing that my family and my legacy would be protected should the worst happen to me.
Related: 3 Expert Tips to Lowering Your Insurance Costs
Just like buying a tailored suit, a life insurance police should be a good fit, reflecting the scope and scale of your business. To that end, when purchasing life insurance, business owners need to evaluate their individual insurance needs based on a number of factors, including their level of debt, income replacement and future obligations. One of the main reasons that U.S. business owners are underinsured and 41 percent don’t have life insurance is that they do not know how to adequately measure their financial risk. This is where entrepreneurs should seek help, as being unaware of vital financial measurements, including the value of their business, leads to business owners receiving inadequate cover or no cover at all. What’s worse, when a company is underinsured, any claims pay-outs will be insufficient to help get the business back on its feet.
Luckily, advancements in technology and big data now provide business owners and advisors with accurate and reliable business valuations that help to identify an adequate level of insurance coverage. Using digital valuation tools, the industry now has the means to evaluate business valuation data with actual underwritten insurance policies, historical insurance trends as well as the industry’s best practice, generating a holistic report.
Related: It's Time to Check Up on Your Insurance Policy
Just as no entrepreneur is the same, no startup is the same. It begins with a thorough understanding of how much insurance they actually need based upon their business value and their equity stake in that business. Armed with this information, entrepreneurs can accurately incorporate vital components into their insurance plan, including buy/sell, key person, life, disability, and property and casualty, to help establish a safe and secure business.
This will also give entrepreneurs peace of mind that their business and loved ones are covered, and provide them with the satisfaction of being able to cross off one more task on that never-ending list of jobs to be done.
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