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Together Again: Digital Mortgages and Life Insurance


A couple of decades ago, around 30% of life insurance policies in the U.K. were sold by banks alongside mortgages, but in the early 2000’s, the Payment Protection Insurance (PPI) scandal rocked the U.K. protection industry, causing that figure to dwindle significantly.

The underlying customer need, however, has not changed – people who take on sizable amounts of debt and who have dependents have a clear need for protection. This need could (and arguably should) be met by the companies providing the mortgages, whether they are banks, brokers, or digital distributors.

Part of the fallout from the PPI scandal is an increased compliance hurdle that affects some providers more than others – banks, for example, have a high compliance hurdle to overcome to launch and distribute “new” protection products. This hurdle results in a degree of inertia for many companies, hindering their ability to reinvigorate protection in this space.

Creating a Superior Digital Experience with a Layered Sales Approach

Over the last five years, there has been a shift in consumer behavior as more customers begin and complete their mortgage applications online. Disruptive digital mortgage brokers have entered the market with early signs of success. Given that this is a relatively new model, protection embedded in a digital journey has not yet been optimized, presenting the industry with an opportunity.

At RGAX, we have designed a seamless mortgage and protection journey for digital mortgage brokers that can be adapted to other parts of the market, including bancassurers, with the ambition to grow their shares of the protection market.

Through our innovation projects in the digital, direct-to-consumer market, we’ve found that adopting a “layered” approach to embedding protection in a mortgage journey can reduce complexity and bring the buyer to the point of sale more naturally. Combining this approach with behavioral science and learning from our experience and testing in digital distribution, we’ve developed a recipe for a superior digital experience that results in conversions. Below are a few examples of layering techniques that directly address consumer pain points and how they might appear in an online life insurance sales experience:


Buying a new home is a high point in many people’s lives – a time when they don’t necessarily want to be thinking about the odds of their untimely demise. Nevertheless, a financial backup plan ensures their family gets to stay in their home should something happen to them. Bringing this fact to their attention doesn’t mean we have to paint a “doom and gloom” picture. Instead, we can lay the groundwork for a protection sale by introducing protection as a normal, standard part of the mortgage journey. Customers tell us that one thing they don’t want is to feel like life insurance is an “add-on” to the mortgage, as it devalues the offer.


We often make the mistake of trying to educate the buyer on the different types of life insurance policies and the various options. The reality is that most customers don’t understand life insurance and have little appetite to do so. Customers simply want to know whether they have a problem, how it may impact them, and what the solution is. Protection can easily be presented in this way by educating buyers on the importance of having a financial backup plan and what that means for their families, not on the ins and outs of buying life insurance.

Note that using words like “financial backup plan” instead of terms like “life insurance” can impact a customer’s ability and desire to keep moving through the process. For more on the importance of choosing the right words when selling life insurance online, read my last article: 6 Ways to Reduce Friction in Life Insurance Sales.


Persuading is what most people think of when they think of selling but selling life insurance alongside digital mortgages doesn’t have to mean a hard sell. In fact, our experiments with customers have found that they were less inclined to buy when “scare tactics” were used. Instead, with the buyer educated on the need for a financial backup plan, the next step is to help the buyer see what that plan might look like.

The buyer’s natural curiosity can work to the distributor’s advantage here, and it is important in a D2C setting to give the customer choice. However, a word of caution. Choice creates friction, as it introduces another decision a customer has to make. For example, in one of our experiments around the Money for Them initiative, we gave buyers the ability to select various sums to see how their choices impacted the prices of their policies. Customers took, on average, two minutes to take action at this point, which suggests it is a point of friction for them. What we observed, though, is that of those customers who made a selection:

  • 43% selected the first quote (£100k)
  • 30% selected third quote (£200k)
  • 17% selected second quote (£150k)
  • 10% selected “see more” quotes and usually selected the highest (£350k) 

The next logical experiment is to test what happens if you remove choice or at least limit it – does that make it easier for a customer to proceed through the journey?

Building Trust

We have to work hard to build trust at every stage of the sale, but it’s particularly important once the buyer is given a quote for life insurance. Price comparisons are a tried-and-true way to help buyers feel confident they’re getting a comparable – if not superior – offer. Online review sites such as Trustpilot may be helpful because they provide unbiased customer reviews, offering the buyer even greater assurance that the product and company deliver as promised, but testimonials are also effective, for indicating that “people who look like me and sound like me have bought this product.”


Finally, we need to make it easy for people to buy. This starts with building an easy-to-use, responsive user interface that increases the buyer’s confidence and creates a satisfying online buying experience. Just as importantly, we should scrutinize the processes we are asking customers to follow. Underwriting is perhaps the best example of a process that can be time-consuming, thus creating friction in the sale that causes many buyers to drop out. Again, our testing has told us that an optimized, low friction underwriting journey can lead to a nearly 100% completion rate. 

So What’s Next

At RGAX, we apply a deep understanding of human behavior observed through both our D2C initiatives and collaboration with our behavioral science team to help our partners develop innovative solutions to these challenges. In the projects we’ve discussed, our focus was on creating a superior customer experience once the buyer was in the market. While creating a digital experience that moves high-intent customers to the close is critical, success also requires filling the top of the funnel with new potential buyers. In 2022 and beyond, we’ll be conducting additional experiments to help our carrier clients further increase the impact of their sales and marketing investments. We look forward to sharing our results with you.


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Written by: Kate Lyons (Crick)

Kate is Head of RGAX UK. With more than 15 years in financial services, her experience allows her to balance a healthy amount of skepticism against ambition when assessing early-stage innovative ideas. She believes reinsurers have a key role to play in the future of the market. Kate is particularly passionate about finding ways to better meet the needs of underserved consumers and is equally at ease developing solutions with traditional insurers and start-ups alike.

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