The coming change will revolve around how consumers are buying life insurance. For companies looking to maintain and possibly grow sales through this downturn, Insurtech companies are a welcomed ally.

How are people currently buying life insurance?

According to the 2016 Insurance Barometer Study by LIMRA, 51 percent of people would prefer to buy  life insurance in person. About one in five people prefer to apply for life insurance online, citing the ability to research, comparison shop and avoid pressure as their reasons.

Given the current hype around insurtech, some may be surprised by these numbers. To industry veterans, however, these numbers likely line up with what would be expected, given the current makeup of distribution. Over the next five years, as demand for online solutions grow, companies will become increasingly competent at removing the barriers that make online shoppers wary of buying life insurance without an agent.

The same LIMRA study reports that the top five major reasons people prefer to buy life insurance online are as follows:

• Convenience
• Ability to research
• Speed
• Ability to compare
• Less pressure

One key observation is that consumers prefer person-to-person support when buying life insurance, so one can assume that online sales supplemented with human support will be key as the market transitions.

Where is the market heading?

There is a strong push towards online sales, either direct from the carrier, or through insurtech companies. Most life insurance companies have some form of accelerated underwriting in place to help streamline the sales process and avoid medical exams for qualified applicants.

One trend that is becoming more commonplace is the use of data to better determine the underwriting risk of applicants. The companies that are able to make the best use of data to streamline the buying process for consumers will be the ones that jump ahead in 2018 and beyond.

Here's how Bill Gates put it:

The most meaningful way to differentiate your company from your competitors, the best way to put distance between you and the crowd is to do an outstanding job with information. How you gather, manage and use information will determine whether you win or lose.

What can carriers and insurtech companies do to get more consumers buying online?

The current and historical data shows that in-person sales are the most common way to buy life insurance. Studies show that 88 percent of consumers are researching life insurance products online before they make a purchase. With the increasing convenience of shopping online at sites like the one my company, NoExam.com, runs, it's clear to see that digital distribution channels will be where much growth occurs in the coming years.

Startups see traditional agents as dinosaurs in an industry that is ripe for disruption. Traditional agents argue that buying online lacks the personal customer service that is so often needed when selling life insurance products. Insurtech companies looking to get it right will need to focus on four key areas:

1. Educating consumers

95 percent of millennials conduct their own online research before deciding what to buy, according to Insurance Barometer.

2. Building trust

Social evidence such as positive customer reviews give future buyers the necessary confidence to commit.

3. Customer service

The main reason people buy in person is to have their questions and concerns answered immediately. Providing support will be key to winning over consumers that are in the research phase.

4. Meet consumer needs

The up and coming generations cite the same reasons for owning life insurance as the older generations, with the exception of supplementing retirement income. Thirty-eight percent of boomers said supplementing retirement income was a reason to own life insurance as opposed to 57 percent of millennials.

During an industry downturn, it's important for companies to be looking past the immediate sales numbers.

While in-person sales are still the main way consumers are buying life insurance, digital solutions will be key in the years to come. To succeed in the digital space, sellers need to commit to improving convenience, education, trust and products.

A quote from Deloitte's 2018 Insurance Industry Outlook is an appropriate closing for this article:

As digital capabilities infiltrate nearly every industry, there appears to be a big opportunity for [life & annuity] companies to transform their business model. In fact, unless the industry commits to integrating transformative technologies more rapidly into their operations, L&A companies could risk not only continued stagnation, but potential leakage to Insurtech innovators as well.

John Holloway is co-founder and director of digital strategy at NoExam.com, a digital life insurance brokerage that sells term life insurance online and over the phone.