Reaching millennials has turned into one of the insurance industry’s biggest challenges, says Peter Castleden, CEO of Indie, a division started by Sanlam Life Insurance in 2016.
This is because about 90% of the industry’s business model is built on a single-channel service, via intermediaries, he says.
“Intermediaries generally only connect with clients within a ten-year range of their own age group. The problem here is that the average age of financial brokers, for various reasons, has been increasing for quite some time now, resulting in fewer players with which younger generations can connect.”
Then there is the time-consuming nature of the sales process, where people have to physically meet the intermediary and get screened to qualify for products.
“With life becoming so rushed, nobody wants to sit and listen to a sales pitch,” he says.
Indie overcomes these barriers in various ways.
It uses digital technology to accelerate the sales process, by allowing clients to buy life insurance, income protection, critical illness, funeral and disability covers, online.
The programme can, within minutes after a user has submitted his details, calculate the risk and cost of cover that would meet a user’s demand.
Clients who accept the quote are insured right away, but only pay for the cover from the end of that month.
Only randomised medical screenings are done to check the accuracy of information.
Clients with very high medical risks automatically fall out of the process.
“Our screening programme is happy with about 85% of people who want to buy cover, but the risk for the rest is too high and we do not have the resources to accommodate them,” he says.
They constantly refine the screening process to ensure accuracy.
“We, for example, view physiotherapy and neurosurgery as much higher risks than they are traditionally seen, merely because these jobs are so dependent on the health of a person,” explains Castleden.
“A neurosurgeon who develops a tremor in one finger, for example, will not be able to work anymore. We rather change the risk profile for this profession, than cause a greater financial burden to all other clients.”
The company is also shifting the sales angle from fear mongering about “what would happen to your family when you are not there”, to an emphasis on wealth creation and “the enjoyment of life now”.
This message is enhanced with a free investment policy offering, called a bounty, that matches a client’s life insurance contributions.
Castleden says they had to reword the offering as it “sounded too good to be true”.
“People have become so used to paying high fees that they think there is a catch or something wrong with our offerings. The truth, though, is that we are able to leverage good deals because our overheads and running costs are much lower than products sold via conventional streams,” Castleden says.
Indie uses multiple sales channels. “User feedback and requests revealed that many users still want some form of human interaction, either to help them through the process or explain things.
We, therefore, refined this part of the sale, by phoning and welcoming new clients on board and also meeting up or phoning clients who requested this interaction.”
The Indie website was launched in August 2017. Because of its use of technology, Indie would be able to service the same number of clients as a traditional insurance giant, but with only about 10% of the number of employees, says Castleden.
“I started out with two employees, one from outside the industry to bring new perspective and one with years of industry experience to keep us grounded,” he says.
“During our first year, most of our time was spent on research and networking.”
Indie now employs nearly 40 people, with skills ranging from old-school veterans to marketing specialists, computer engineers and designers.
Planning was initially quite difficult because everything was new territory. “It’s really difficult to quantify what and how much we can do, in what amount of time and with what number of employees, when you are breaking new ground,” he explains.
Since the website’s official launch in January, sales have grown exponentially. Castleden expects numbers to grow by between 1 000 and 2 000 new clients each month by December.
Most of the marketing is done via paid searches, the sponsoring of educational content and social media.
“Instead of cold calling or pushing people into sales, we are pulling them in when they click on our links,” he says.
While the initial focus was on millennials, Indie has scaled its solutions to also appeal to other groups.
About two-thirds of sales are in the under-40 market, but with quite a number of clients above 50. Clients from across the income scale have signed up, and the gender split is roughly equal.
Being backed by Sanlam Life Insurance is a huge advantage. It funds Indie projects and underwrites Indie’s product offerings. It also shares resources.
Yet, says Castleden, Indie is operationally independent, giving it a lot of freedom to experiment and test new ideas.
“In comparison with traditional insurance companies, Indie has a much more design-led approach to the development of new products and we use technology to bring these products to life.
Where other companies might take years to plan the launch of a new product, we have the luxury of addressing challenges as we go,” Castleden explains.