Digital access to life insurance has made policies easier to purchase, as well as easier to understand. But there are even more ways our digital era has made life insurance quotes easier to obtain and understand for today’s consumer. Marketing, engagement, and customer care have all been made simpler with access to digital channels.

Digital Marketing And Outreach For Life Insurance

Digital Awareness: Because of unprecedented access to the internet, a greater number of people can now understand life insurance policies and how these policies fit into their financial goals. This widespread access means more people will understand why and when they’ll need life insurance coverage. It also means obtaining realistic life insurance quotes is faster and easier.

Online Engagement: Nowadays, potential policy buyers can quickly contact a life insurance agent who can find a life insurance policy that meets their needs. Online engagement through these sorts of digital channels gives life insurance providers every opportunity to convert potential customers into lifetime clients. It also allows them to follow leads and answer questions from potential customers without wasting time or resources.

The Digital Sales Process For Life Insurance

Digital vs. Human Channels: With both digital and human channels available for customers, insurance agents can establish a hybrid model that allows their customers to follow through on the sales process in their preferred manner. Agents can also collect data, manage schedules, and handle appointments digitally. This model allows insurance agents to operate more efficiently and focus more time on establishing rapport with their customers.

Innovative Pricing Models: Life insurance marketing has mainly focused on households with a high amount of assets or wealth. However, younger generations have responded strongly to newer pricing models, such as “dynamic pricing” or “pay as you go” systems. Some life insurance companies have adopted these types of pricing methods, and digital data collection makes these models significantly easier to implement.

Digital Access to Life Insurance Agents

Digital Customer Interaction: Digital access provides new markets and demographics for life insurance sales. Younger customers who may not feel comfortable with typical human sales channels are more likely to opt for digital sales channels where they can engage in the process at their own pace. Additionally, customers who do prefer human sales channels can consult agents more efficiently through the use of digital scheduling and appointments.

Ease-of-Use: With digital access to life insurance more common than ever, insurance agents are much easier to reach. This type of open communication instils trust in customers, especially when policies can become complicated or hard to understand. Additionally, digital channels can operate 24/7 and provide customers with quality care when agents can’t. The combination of digital and human channels creates an environment focused on customer care, driving sales and engagement even further.

With the 10^th anniversary of the Lehman Brothers’ shocking and unprecedented bankruptcy this month, Katina Hristova looks back at the impact the collapse has had and the things that have changed over the last decade.

Saturday 15 September 2018 marked ten years since the US investment bank Lehman Brothers collapsed, sending shockwaves across the financial world, prompting a fall in the Dow Jones and FTSE 100 of 4% and sending global markets into meltdown. It still ranks as the largest bankruptcy in US history. Economists compare the stock market crash to the dotcom bubble and the shock of Black Friday 1987. The fall of Lehman Brothers was a pivotal moment in the global financial crisis that followed. And even though it’s been an entire decade since that dark day when it looked like the whole financial system was at risk, the aftershocks of the financial crisis of 2008 are still rumbling ten years later - economic activity in most of the 24 countries that ended up falling victim to banking crises has still not returned to trend. The 10^th anniversary of the Wall Street titan’s collapse provides us with an opportunity to summarise the response to the crisis over the past decade and delve into what has changed and what still needs to.

As we all remember, Lehman Brothers’ fall triggered a broader run on the financial system, leading to a systematic crisis. A study from the Federal Reserve Bank of San Francisco has estimated that the average American will lose $70,000 in lifetime income due to the crisis. Christine Lagarde writes on the IMF blog that to this day, governments continue to ‘feel the pinch’, as public debt in advanced economies has risen by more than 30 percentage points of GDP – ‘partly due to economic weakness, partly due to efforts to stimulate the economy, and partly due to bailing out failing banks’.

Afraid of the increase in systemic risk, policymakers responded to the crisis through quantitative easing and lowering interest rates. On the one hand, quantitative easing’s impact has seen an increase in asset prices, which has ultimately resulted in the continuation of the old adage, the rich get richer and the poor get poorer. The result of Lehman’s shocking failure was the establishment of a pattern of bailouts for the wealthy propped up by austerity for the masses, leading to socio-economic upheavals on a scale not seen for decades. As Ghulam Sorwar, Professor in Finance at the University of Salford Business School points out, growth has been modest and salaries have not kept with inflation, so put simply, despite almost full employment, the majority of us, the ordinary people, are worse off ten years after the fall of Lehman Brothers.

Lowering interest rates on loans on the other hand meant that borrowing money became cheaper for both individuals and nations, with Argentina and Turkey’s struggles being the brightest examples of this move’s consequences. Turkey’s Lira has recently collapsed by almost 50%, which has resulted in currency outflow and a number of cancelled projects, whilst Argentina keeps returning for more and more loans from IMF.

Discussing the things that we still struggle with, Christine Lagarde continues: “Too many banks, especially in Europe, remain weak. Bank capital should probably go up further. 'Too-big-to-fail' remains a problem as banks grow in size and complexity. There has still not been enough progress on how to resolve failing banks, especially across borders. A lot of the murkier activities are moving toward the shadow banking sector. On top of this, continued financial innovation—including from high frequency trading and FinTech—adds to financial stability challenges. In addition, and perhaps most worryingly of all, policymakers are facing substantial pressure from industry to roll back post-crisis regulations.”

The Keynesian renaissance following that fateful September day, often credited for stabilising a fractured global economy on its knees, appears to have slowly ebbed away leaving a financial system that remains vulnerable: an entrenched battalion shoring up its position, waiting for the same directional waves of attack from a dormant enemy, all the while ignoring the movements on its flanks.

If you look more closely, the regulations that politicians and regulators have been working on since the crash are missing one important lesson that Lehman Brothers’ fall and the financial crisis should have taught us. Coming up with 50,000 new regulations to strengthen the financial services market and make banks safer is great, however, it seems  that policymakers are still too consumed by the previous crash that they’re not doing anything to prepare for softening the blow of a potential new one. They have been spending a lot of time dealing with higher bank capital requirements instead of looking into protecting the financial services sector from the failure of an individual bank. Banks and businesses will always fail – this is how capitalism works and no one knows if there’ll come a time when we’ll manage to resolve this. Thus, we need to ensure that when another bank collapses, we’ll be more prepared for it. As Mark Littlewood, Director General of the Institute of Economic Affairs, suggests: “policymakers need to be putting in place a regulatory environment that means that when these inevitable bank failures occur, they can fail safely”.

In the future, we may witness the bankruptcy of another major financial institution, we may even witness another financial crisis – perhaps in a different form. However, we need to take as much as we can from Lehman Brothers’ collapse and not limit our actions to coming up with tens of thousands of new regulations targeted at the same problem. We shouldn’t allow for a single bank’s failure to lead us into another global crisis ever again.

At the heart of the Queen’s speech today were an array of proposed bills that prepare the UK for a smooth exit from the European Union. Of 27 bills, eight pertain directly to Brexit and its implications for key sectors.

There are bills to convert EU laws to UK laws and some measures on immigration, fisheries, trade, nuclear power, agriculture and sanctions.

Below Tom McPhail, Head of Policy at Hargreaves Lansdown, discusses the proposed changes with Finance Monthly.

Given what a hash the Conservatives made of using the General Election to increase their majority, and given the overwhelming priority of Brexit, there were a least a few positive announcements in the forthcoming programme. The most important dog that didn’t bark was any kind of announcement on a savings and investment policy; we will continue to press the government on this issue and to look at the possibility of introducing a Savings Commission.

• Financial guidance body
• Unfinished business on pensions and savings
• Social care consultation
• Education
• Digital strategy
• Consumer markets, including the energy market

Financial guidance body

The creation of a new financial guidance body, merging the Money Advice Service, Pension Wise and the Pensions Advice Service into one single body was unfinished business from the last parliament. This guidance service is welcome and necessary, but there remain significant challenges in closing the advice gap and in helping consumers to get the guidance and information they need to make good financial decisions. This is an issue on which the Treasury needs to continue to focus and to work with the FCA and the financial services industry. We also believe that all investors should be encouraged to undertake a financial health-check at age 50 as preparation for their transition from work to retirement; for most people, this is an age when it they are close enough to retirement for it to seem relevant but also far enough way to make meaningful change to their eventual outcomes.

Unfinished business on pensions and savings

It is hardly surprising there was no announcement on the state pension triple lock, as it currently has no formal legislative status; this is something which the Conservative party will probably want to quietly revisit when it feels it has a little more pensioner goodwill in the bank. This could take a while. Similarly, it is hardly surprising there was no mention of any legislation to means-test the winter fuel payment.

In the meantime, there was a disappointing lack of any announcement on a savings and investment policy, something which this country and in particular the younger generations urgently need.

We are also disappointed the government has made no mention of plans to press ahead with a ban on pension cold-calling, something which would now be in train were it not for the General Election.

Social Care consultation

We welcome the announcement of a consultation on care costs. Given the structural damage the Tory party inflicted on itself in the election campaign through its mismanaged social care announcement, it would have been a wasted opportunity not to press ahead with a consultation on reform.

To put this in context, depending on assumptions used such as the continuation of the Triple Lock, we might see the cost of the state pension increase by perhaps 1% of GDP over the next 50 years (from around 5.5% today). The cost of long-term care can be expected to increase by another 1% of GDP over the next 50 years as a result of the ageing population (from 1% of GDP to 2%) and over the same period, the ageing population is likely to increase health care costs generally by over 5% of GDP from 7.3% to 12.6%.

Financial education

The Queen’s speech makes reference to government plans for school and technical education. As part of this programme, we believe greater prominence should be given to financial education and financial literacy. This needs to be addressed across all ages of the population, from those in Junior school through to investors of retirement age.

Digital Charter and digital ID

The government proposes to introduce a new digital charter to ensure the UK is a safe place to be online. We support this initiative and would encourage the government to work with the financial services industry to develop a private sector Digital ID to complement the existing public sector Verify system. Individuals conducting financial transactions, opening accounts, transferring money or using the pension dashboard in the future, need a simple electronic mechanism to prove they are who they say they are. A Digital ID is the answer to cutting bureaucracy, reducing costs and speeding up processes; the government’s new Digital charter may offer a vehicle to accelerate this process.

With global cybercriminal risk at an all-time high, the findings of a new survey conducted by global consulting firm Protiviti show positive progress for organizations – an increasing number of them have boards of directors and management that are actively engaged with cybersecurity and adopting best practices in their IT departments. Protiviti's 2017 Security and Privacy Survey shows that current board engagement levels are at 33%, compared to 28% in 2015.

"While the increase in boards of directors' and company management's engagement with information security is a positive sign, it's imperative that leadership keeps closer tabs on the state of their organizations' cybersecurity programs," said Scott Laliberte, a Protiviti managing director and leader of the firm's global IT security and privacy practice. "Particularly as new technologies are introduced and new approaches to generating revenue are deployed, it's increasingly important to reexamine existing data security and privacy processes on a regular basis - ensuring that the right systems and people are in place to keep pace with changes."

Key findings from Protiviti's survey include:

• Having an engaged board and a comprehensive set of security polices make a huge difference – In assessing the results for companies in which the board has a high level of engagement in information security, these organizations rate considerably higher than other companies in nearly all facets of information security best practices. The same holds true for organizations that have all of the core information security policies in place (as recommended by Protiviti). When it comes to security, these foundational qualities distinguish top-performing organizations from the rest of the pack.
• A concerning number of companies – nearly one in five – cannot confidently identify or locate their most valuable data assets. Protecting these "crown jewels" requires a data classification scheme and effective policies that are supported across the enterprise.
• People, as well as policies, are key to an effective security program. Security policies are best supported with training programs and communications for employees, who are often responsible, unintentionally or otherwise, for enabling data and security breaches. Organizations should focus on promoting a culture of security policy compliance.
• Vendor risk management must mature – As the use of cloud-based storage and external data-management vendors increases, the importance of vendor risk management grows. Notable gaps currently exist between top-performing organizations and other companies when it comes to overall knowledge of vendors' data security management programs and procedures – areas that might stand between an organization's crown jewels and cyber-attackers.

The percentage of companies that have adopted what Protiviti considers   and recommends – as five core information security policies to have in place are:

• An acceptable use policy (80%)
• A records retention/destruction policy (78%)
• A data encryption policy (70%)
• A written information security policy (69%)
• A social media policy (59%)

However, there is significant progress to be made because only 38% of surveyed companies have all five information security policies in place today.

The Protiviti 2017 Security and Privacy Survey delivers insights on the specific security policies and qualities that distinguish top-performing companies from other organizations. The survey also offers trends to watch for and identifies prime action items technology leaders can take to strengthen their companies' security capabilities.

(Source: Protiviti)