Findings in a newly released study by Acxiom on life insurance shopping reinforce other studies we have seen over the last few years. Namely, 50% of the population is uninsured, and 80% of those with insurance likely don’t have enough. These are rather disheartening statistics.
As insurance professionals, we could latch on to this data to predict that the life insurance business has peaked and it’s going to be all downhill from here. However, the eternal optimist that I am, I’d like to suggest just the opposite. These statistics, in my view, suggest that the glass is more than half full. Along with reviewing existing customers to see if they need to add to their coverage, which is a priceless opportunity, the study suggests:
- Insuring just 10% of uninsured Millennial and Gen X consumers may represent more than $5 billion in sales.
- Converting just 10% of uninsured Baby Boomers may be worth as much as $3 billion in annual premium.
2012 marks my 25th year in the life insurance business. Although a lot has changed within that time frame, one major consideration has not: the key triggers that drove life insurance purchases then are the same ones driving them today. People are still getting married, buying (and refinancing) houses, having children, starting businesses, losing loved ones, taking care of parents, getting divorced… and the list goes on.
These life events create risks for the individuals and their loved ones that life insurance products can mitigate. I really don’t think people love their families any less today than they did 25 years ago either. So, why are they subjecting themselves to more risks than we have seen in the past by remaining uninsured or underinsured? I’d like to discuss two possible explanations: 1) We’re lagging technologically, and 2) We’re not checking in.
We’re lagging technologically
Even though the triggers driving the need for life insurance remain the same, the way people engage in the purchase of life insurance has changed drastically — and the industry hasn’t kept pace with the change.
We have a whole generation of Millennials (roughly 30 and under) who have grown up with technology. Their lives revolve around connecting with friends and families via their smart phones and iPads, using email, text messaging, Facebook and Twitter. They search online for information and education, read blogs, join groups, etc. The Gen Xers (roughly 30-45 years old) aren’t far behind in their use of technology.
Even the Boomers (45-64 years old) are using technology more and more every day. And with 10,000 Boomers turning 65 every day for the next 20 years, it’s not hard to see that, soon, even the senior population (65-plus) will be more comfortable with modern and, in some cases, fad technologies. These technologies are here to stay (at least until they are replaced by something newer and cooler).
To be more relevant with prospects and customers, carriers must do the following:
- Examine attitudes, behaviors, motivations and beliefs about insurance shopping.
- Understand channels, interactions and new technology.
- Interact and communicate in a meaningful way.
In other words, we, as insurance professionals, need to engage with our customers and prospects where they are engaging. If they’re online, searching the web, reading blogs and joining in group discussions, we have to be there too, if we want to have impactful interactions. If they’re searching online for local agents, you need to make sure your information shows up. If they’re getting opinions from friends and family on Facebook, you want your name to be referenced as someone to contact.
Acxiom’s research puts forth clear evidence that 68% of Millennials used social media as part of their life insurance shopping process, and 43% of Gen Xers conducted searches online to find information about life insurance. These groups are still open to traditional methods, such as direct mail and one-to-one contact with agents, but digital channels, such as email and website interactivity, are part of their everyday life.
Marketers in general, but especially life insurance marketers and sellers, should embrace (not fear) life in the age of the empowered consumer. After all, we live at a time when sophisticated technology solutions that, when teamed up with a great marketing strategy, can help us better connect with our target audience and gain the maximum value from our marketing budgets.