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31 May 2022

Digital Point-of-Sales Platforms in Life Insurance: A Primer

Abstract

COVID-19 created lasting changes in the distribution of life insurance. The evolution of direct-to-consumer (D2C) sales was slow until the pandemic. Two years after the pandemic began, D2C channels and policy sales have grown, driven by the expansion of digital sales channels and the development and implementation of digital point-of-sale (POS) platforms.

The pandemic reversed a trend of downward sales as consumers became more aware of the need for life insurance and North American life-annuity insurers are looking to increase sales to improve their operating results. New distribution channels that emerged in the last decade favor direct-to-consumer or hybrid (online consumer/ agent) models. The pandemic gave rise to a substantial increase in the number of online agencies and digital insurance companies—and with them the development of digital POS platforms.

A digital POS platform offers consumers the ability to buy life insurance online instantly. These cloud-based platforms are made up of a group of sites and applications which—via APIs—provide insurers and other organizations the ability to offer services, data, and capabilities associated with the sales process. Digital insurance platforms can function as POS, component, or full-stack end-to-end solutions. This report only discusses POS platforms, which typically include needs analysis, quoting, application, and underwriting functionality.

This report discusses the various options an insurer can pursue to sell life insurance via online channels. We will review the channels and the technologies that run them. We will also provide a high-level overview of digital POS platforms available in the market to help insurers who are considering more direct-to-consumer or hybrid models to identify vendors selling platforms that can help them build their own digital channels.