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Moves That Slow Postal Delivery May Affect Insurers

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Changes at the U.S. Postal Service could cause headaches for life insurers and health insurers that still depend on USPS mail to reach customers and prospects.

(Related: Use Target (or Blanket) Marketing To Define Your Success)

The Postal Service has been taking mail-processing machines out of some facilities, in an effort to cut costs, according to and other news organizations.

USPS is supposed to fund its operations with mail delivery revenue, but it faces an unusual federal law that requires it prefund retiree health benefits. That means that it’s responsible for large retiree health benefits payments, in addition to having to deal with COVID-19 response expenses and competition from UPS, FedEx and the Internet.

President Donald Trump told a Fox Business host Thursday that he’s opposing congressional Democrats’ request for $3.6 billion in mail-in voting funding, and $25 billion in support for the U.S. Postal Service, partly because of concerns about fraudulent mail-in ballots.

“Now they need that money in order to have the Post Office work so it can take all of these millions and millions of ballots,” Trump told the host, Maria Bartiromo. “If they don’t get those items, that means you can’t have universal mail-in voting, because they’re not equipped to have it.”

Trump said Democrats in Congress want the mail-in voting funding “for something that’ll turn out to be fraudulent.”

Many news organizations are running reports about slowdowns in mail delivery. KRON, a radio station in California, says livestock mail delays have led to an increase in turkey chick deaths.

Members of Congress last week sent letters to the postmaster general, Louis DeJoy, asking him to cancel service and equipment changes that might slow mail delivery.

Any changes that do slow delivery could have a big effect on insurers. because insurers make heavy use of the Postal Service.

The Postal Service reported, based on household diary data collected in 2019, that insurers accounted for 1.2 billion of the 11 billion bills that U.S. households received during the 12-month period ending Sept. 30.

Insurers also accounted for 200 million of the 3.7 million statements that households received, according to the diary data.

The Data & Marketing Association (DMA) has reported, in its 2018 statistical fact book, that 89% of insurers and financial services companies used direct mail, and that they were more likely to use direct mail than any other types of companies surveyed.

In 2017, insurers sent 5.8 billion pieces of direct mail, according to Mintel data included in the DMA fact book.

Life and health insurers also face requirements to send policyholders and annuity holders many types of notices through the mail.

Jackson National Life Insurance Company is so concerned about the possible effects of COVID-19-related delays on mail delivery that it has posted a notice about that concern at the top of its website:


There may be a delay in receiving certain contract related materials, including the annual prospectus, annual reports and semi-annual reports, sent via USPS due to delivery suspensions to certain countries that are currently in place. Jackson is making every effort to provide those materials to you. In the interim, you may contact Jackson to request those contract related materials be sent to you via e-mail.

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