Life insurance companies are under pressure. Their traditional business model is stagnating. Since 2014, premiums for U.S. life insurers have fallen at an average annual rate of 4%, the industry’s return on equity has been flat, and persistently low interest rates continue to depress returns.

Insurers have been slow to adjust to these new realities. Despite their efforts to trim expenses, many are still suffering from bloated costs. Agent commissions and distribution costs, which account for about 60% of a typical insurer’s overall operating costs, have ratcheted up at an average rate of 5% since 2010. The productivity of agents, who handle more than 90% of all policy sales, has slumped.

To make matters worse, life insurers aren’t pleasing their customers. The average Net Promoter Score® for U.S. life insurers is 4.5%, according to Customer Behavior and Loyalty in Insurance: Global Edition 2017, Bain & Company’s survey of insurance customers in 20 countries.

One way insurers are trying to address these problems is by expanding their use of digital channels and data analytics. But they are late to the party. Life insurers are saddled with cumbersome and costly processes and legacy systems, and they have long underinvested in IT. In 2016, insurers spent 3.2% of their annual revenue on IT

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