A new joint study by LIMRA and Maddock Douglas reveals there are 19 million “stuck shoppers” of life insurance in the United States — that is, consumers who believe life insurance is valuable and necessary but have been derailed during the shopping process.
“Our focus groups consistently described shopping for life insurance and other financial products as confusing, frustrating and overwhelming, which kept them from making a decision on what to buy,” says Scott Kallenbach, research director, LIMRA Strategic Research. “The words, images and messages used to explain financial products don’t seem realistic or relatable to many of these consumers. Our research was designed to figure out how companies can improve their communications to help these consumers get the coverage they want and need.”
The study uncovered a key factor in the stuck shopper dilemma: communication that the industry employs lacks authenticity. Authentic communication is more than just using everyday language and laymen’s terms. It also includes relatable visuals and attainable goals. There are 6 elements that make up authentic communication:
1. Easy to Understand — Language that we use everyday
2. Down to Earth — Images that feel realistic
3. Memorable — Communication that is interesting
4. Positive — Messages that are warm and comforting
5. Credible — Sources of information that are trustworthy
6. Relevant — Communication that says the company understands them, and who they are
Consumers say one of the biggest obstacles is that they don’t understand many of the terms used in insurers’ marketing materials. Nearly three quarters say they are not confident they could define what “underwriting” and “permanent life insurance” meant; two thirds are not confident they understood the terms “rider,” “guarantees,” “living benefit,” and “annuity.” To view more examples, visit: Are We Really Communicating Effectively?
“Authentic communication is much more than a revamping of marketing materials and ad campaigns,” says Maria Ferrante-Schepis, managing principal for Insurance and Financial Services Innovation at Maddock Douglas. It is a major innovation opportunity if internalized by the entire culture of an insurance company.
“This research uncovers where insurers can improve and builds on work we have done in other areas of insurance, spotlighting the importance of communication in the overall customer experience,” she adds.
The study consisted of more than 1500 online interviews to quantify consumer attitudes, behaviors, and perceptions related to insurance industry language and 30 in-person interviews where consumers shared their experiences, emotions and feelings related to insurance industry language and images.
To view a video clip of consumers describing what annuitize means, visit this link: In their own words.