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Thought leadership, insights, and success stories

How Innovation and Partnership Can Close the Financial Protection Gap

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It's no secret that major changes are needed across the life insurance distribution system to improve the customer experience and better support the demand for digital solutions. While insurtech solutions help accelerate consumer access to much-needed financial protection, the industry has struggled to keep pace with the demand for quick and easy online products.

Meeting consumer expectations for click-to-buy insurance products has been difficult, leaving too many people without important financial protection. According to the financial research firm LIMRA, over 100 million Americans are either completely uninsured for life insurance or underinsured.

Improved collaboration between carriers and insurtech partners, partially driven by COVID-19, has significantly enhanced consumers' digital purchasing experiences.

RGA has been at the forefront of this evolution in the life and health industry, identifying and collaborating with innovative partners, investing in them, and connecting them with carriers so that we can all do our part to address the existing protection gap. By bringing investment and innovation together, we strive to help everyone access the financial protection they need.

Pendella is one insurtech partner that shares the RGA vision, and its platform is revolutionizing the distribution of life insurance in middle America. 

The Modern-Day Life Insurance Challenge

If you ask most people about their experience buying an individual life insurance policy, they'd probably say it is not an easy or particularly enjoyable process that often requires medical exams or bloodwork. In addition, many people typically think that they won't qualify for coverage because of strict underwriting requirements, that it will take too long to buy a policy, or that the coverage will be too expensive.

Full-time employees may opt for coverage through an employer group policy, but the payout from these policies is often far less than what is needed to afford ongoing living expenses. A LIMRA survey conducted last year noted that the median sum of a group life policy is around $20,000, or one year's salary. LIMRA estimated that 42% of families "would face financial hardship within six months, and a quarter would suffer financially within a month" if a dual-income household lost one of the primary wage earners.

Because people do not understand the value and affordability of individual life insurance, or because buying a policy is seen as cumbersome, the number of Americans who own a life insurance policy has hovered at its lowest point in 10 years, according to LIMRA. We don't think it's a coincidence that almost half of Americans surveyed said they’d be likelier to buy life insurance if "simplified" underwriting were used.

Closing the life insurance protection gap

That's where Pendella comes in. Founded by former life insurance agent and entrepreneur Bob Gaydos, Pendella's mission is to close the life insurance protection gap by making individual life and disability insurance available to all people, regardless of age, health status, or income level.

Bob knows that selling life insurance doesn't have to be complicated. He started in the business more than 30 years ago, back when agents sat at the kitchen table with their clients and talked through policy options and benefits. He saw firsthand how increasingly more people were being left behind by the life insurance market without protection for their greatest assets.

Building a user-friendly experience

He realized a decade ago that technology was evolving to allow life insurance to be underwritten entirely online. So, in 2018, he began building the Pendella recommendation engine with a team of technology and benefits professionals with decades of insurance experience.

The team worked to make it quicker and easier for people to obtain coverage by refining the underwriting information needed to bind an individual policy online to a few basic questions. The underwriting process is now completely automated through Pendella's SaaS technology platform, powered by artificial intelligence and big data.

Individuals can evaluate various policy types, coverage amounts, and terms that fit their needs from several leading carriers, many of which are RGA clients. People can then buy a policy online within minutes. About 75% of individuals qualify for coverage through the Pendella platform without needing doctor's visits and blood work.

In this recent article by Digital Insurance, Bob talked about how creating this simple, user-friendly experience opens up access to the critical protection of life insurance. He stressed that "For the engine to have purpose, we have to have multiple products and multiple journeys so that we can take care of everybody."

Meeting customers where they are

The Pendella software can be embedded into distributors' current technology platforms and customized to their brand through white labeling, which enables them to sell individual life insurance directly to consumers, meeting customers where they are. Pendella handles back-end support and all customer service interactions and provides ongoing marketing content to support its partners with life insurance education and lead nurturing.

Pendella doesn't replace or eliminate life insurance agents. Instead, it equips agents with the skills and tools they need to sell coverage more quickly and easily. The SaaS solution offers a distinct value proposition that fills an important gap in the current customer–carrier relationship – ensuring that traditional carriers can reach consumers with their products and meet a wide range of consumer needs.

Perfecting Partnerships for the Greater Good

We've built a close, mutually beneficial relationship with Bob over the last several years, leading to multiple product innovations.

RGA's partnership with Pendella exemplifies our commitment to finding solutions for underserved markets by working with other innovative, mission-focused companies.

As carriers continue to be challenged by innovation and realize that they cannot embark on the journey of digital transformation alone, RGA will be there with experienced partners like Pendella. Working together, we can build technology that enables the industry to be accessible to everyone and ultimately more competitive.


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Written by: Max Kraus

Max Kraus is Director of Ventures & Partnerships and is responsible for managing the Americas Venture Program at RGAX. He identifies insurtechs within the innovation ecosystem that can help RGA and its carrier clients solve operational challenges and support growth. Max has an Honours Business Administration (HBA) degree from the Ivey Business School.

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