What's the Potential of Allstate's Online Life Insurance Sales?

As we break for Thanksgiving, I&T is wrapping up our final issue of the year. This week, I finished up one of our features for that issue about customer experience. Shortly after handing in the story, a release from Allstate came across my desk. It said:

On November 19, Allstate became one of only a handful of insurance carriers in the United States to offer an online "quote-and-buy" option for a life insurance policy. A customer who views a quote for TrueTerm(sm) term life insurance on allstate.com has the option to click further to fill out a simplified application and purchase the policy, subject to approval by Allstate. Alternatively, the customer can take the application to an Allstate agency to complete the purchase.

"Our goal was to create a better shopping experience for customers by enabling them to act immediately after viewing a life insurance quote," said J. Wayne Kullman, vice president, Allstate Financial Direct sales and fulfillment. "As we tested this new online feature, it became clear that many customers appreciate the convenience of one-stop shopping and buying for their life insurance needs."

This is something that Bruce Temkin, a customer experience consultant based in Boston, told me insurers had to do better: Simplify the application process and making it appear less daunting — and let people apply online. Doing so might mean that insurers have to take on more risk in the short term, Temkin continues, but refining the process over time by using predictive analytics will allow insurers to more accurately price the customers who use the simpler, online application form in the future.

"Insurers need to figure out, 'What is the minimum amount of stuff we need to get from people in order to bind?'" Temkin says. "As soon as a couple insurers have smooth, easy application processes, there's no way their competitors can operate with really crazy information requirements."

By taking this plunge now — in the same year that Allstate ramped up its online distribution capabilities on the P&C side by acquiring Esurance — the insurer is making a statement that it knows how the consumer of the future is going to expect to buy policies.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio