North American Life Insurers Are In Digital Denial
Are you feeling wistful about what online insurance experiences used to be? Can’t remember how to get back to the Wayback Machine? You can indulge that nostalgia by simply shopping online for life insurance.
Beginning in Q3, we looked at 13 websites—ten carriers, two online agencies, and one aggregator—in the US and Canada to get a sense of how easy it was for someone who was interested in buying a basic term life policy to use digital channels learn about coverage options, get an estimate, find and connect with an agent or advisor, and apply (up to the binding process).[i]
What prompted us to explore the digital buying experience for American and Canadian life insurance shoppers? Our data showed that when considering life insurance, shoppers:
- Turn to personal connections. The financial dynamics of the family and social networks play an important role in the insurance research process, especially for younger buyers. Nearly 4 in 10 Americans said that they had used friends and family to research life insurance, while 13% of Canadians said that they had spoken with family or friends about the coverage. These personal connections are manifest through comments like, “I bought my life insurance from Company X (or Agent Y). You should check them out”, whereupon the dutiful relation goes to the life insurer’ or agent’s website.
- Rely on myriad digital touchpoints. As digital touchpoints have proliferated, so have the choices that customers have to learn about life insurance. About one in four of the US life insurance buyers we surveyed are using social media, viewing an online advertisement or video, or visiting the insurers’ web or mobile site or app. Canadians are doing the same, turning to a growing number of digital touchpoints as they explore life insurance: 14% said that they had visited a provider’s website.
- Apply spontaneously. How many times have you heard that life insurance is “sold” , not bought? The life insurance industry is rife with clichés about how complex life insurance sales are and the need for them to be conducted frankly at the kitchen table. But instead of being a high consideration purchase, 30% of Americans who had purchased life insurance in the past year decided to apply for life insurance either the same day or just moments before.[ii] And while life events drive life insurance interest, 44% of Canadians said they purchased life insurance because they “simply thought that they needed it”.
What Did We Learn?
The digital teams at life insurers have their work cut out for them. Compared to the digital auto insurance experience, the life insurers we looked at lag that common online insurance shopping experience by seven or eight years. The five Canadian sites averaged 47 in our 100-point scale, while the US sites did slightly better at 56 out of 100. The individual category scores reveal numerous areas where there is room for improvement in digital sales content and functionality. Here’s just two:
- Digital business teams have work to do to help customers choose the right coverage. While digital business teams have done a great job in creating landing pages that capture the attention of life insurance shoppers and get them to click on various features and pages, except for one Canadian and two US sites, the life insurance sellers we looked at often fall short of expectations. What are the biggest gotchas for carriers? Most of the life insurance websites we looked at are missing: simple comparison charts that help customers compare different coverages at a glance; helpful recommendation tools to guide customers to the right amount of coverage; easily digested content about coverage; and interactive help tools like chat that can answer the customer’s question in the moment.
- Executive leadership has to shore up digital enablement for advisors. Life insurance sellers have to do a lot more work to send better qualified leads to advisors, get advisor responses to customers faster, and enable sales through their advisors. A surprising number of life insurance sites had no advisor locator at all, and many did no basic qualification of what the customer was interested in the agent contact form, leaving an expensive advisor to cold call back. And in the most jaw dropping example of leaving money on the table, considering that nearly a third of US life insurance shoppers are spontaneous appliers, one US life insurer promised that their agent would get back to us in ….five business days, a pledge that they dutifully honored.
Learn more about what we learned, including what our most digitally savvy life insurance sellers—PolicyGenius in the US and Sun Life Financial in Canada—are getting right. Check out our two new reports– the "2016 Canadian Life Insurance Digital Sales Functionality Benchmark" and the "2016 US Life Insurance Digital Sales Functionality Benchmark" to read why it’s time for life insurance sellers to get serious about redesigning their digital experience
[i]The Canadian firms were Empire Life, Great-West Life, Kanetix, Manulife, and Sun Life. The eight US life insurance firms were Haven Life, John Hancock, MassMutual, MetLife, New York Life, Northwestern Mutual, PolicyGenius, and Prudential.
[ii] Source: Consumer Technographics North American Financial Services Customer Life Cycle Survey, Q2 2016 (US)