True Blue Life Insurance, a provider of online life insurance policies with no medical exam requirement, recently conducted original research to better understand current consumer preferences in researching and buying policies.
This amid ominous forecasts of insurance industry challenges and threats that lie ahead for 2019, including economic, cultural, regulatory, and technological.
One current Deloitte report cites, “the potential for economic slowdown and ongoing disputes over tariffs and trade rules may cast a shadow on the insurance market outlook.”
This report also asserts, “…while the industry may have to cope with a plethora of internal and external pressures, their impact remains very much in each insurer’s own hands. Perhaps the biggest determining factor will be how committed and prepared each insurer is to adapt quickly to a rapidly changing economy and society.”
Given rampant changes within both industry and the consumer marketplace overall as consumer mindsets evolve, True Blue’s new survey’s findings and insights present a significant opportunity for policy purveyors.
Pursuant to the results of this original research, below are four key considerations life insurance agents—and companies at large—need to address this year to better engage with potential clients for long-term customer loyalty.
- Consumers prefer homies
Nearly eight out of 10 people surveyed stated they felt more confident buying insurance from a local agent.
There may be an emotional aspect to this. Buying life insurance has ramifications that car insurance or homeowner’s insurance doesn’t because it forces people to consider their mortality. So it’s more personal. Having a local agent that the client can talk to face-to-face over matters of life and death can make clients feel less vulnerable.
Also, in developing an in-person relationship, the agent becomes an ad hoc personal adviser and advocate who takes the time to listen and find out your individual needs.
The importance of localism should not be underestimated, especially with older clients. Having an agent who is practically a physical neighbor means they understand both the advantages and challenges of living in the client’s community.
The reason agencies are happy to sponsor local sports teams and schools is because it makes them part of the community fabric, which strengthens the relationships with clients. Also, their livelihood is dependent in part on referral and word-of-mouth because their client pool is local, not national, so they treat clients accordingly.
What the study did not delineate was the breakdown of responses by age or what the median stage of the respondents was. It would seem likely that Millennials would prefer shopping for insurance online since they are enthusiastic users and pioneers of using e-commerce. It is estimated that only 36% of Millennials have life insurance, compared to 60% of those 30-49 years of age. So the challenge for online life insurance agencies is to convince younger people the value of having life insurance (the “why”), not the benefits of purchasing a policy online.
Conversely, among older clients, the “why” is self-explanatory, but convincing them to use technology instead of the local agent is the challenge. People are resistant to change, so online life insurance companies need to think locally in their approach and should implement services and features that provide more personal customer support interaction. Agencies also must ensure that the online application and interfaces are intuitive and user friendly to show consumers that buying policies online saves time, is less cumbersome and will likely also save money.
- Health insecurities
According to data from the Behavioral Risk Factor Surveillance System (BRFSS) published in Sept. 2018, adult obesity rates in the United States now exceed 35% in seven states, 30% in 29 states and 25% in 48 states. West Virginia has the highest adult obesity rate (38.1%) and Colorado has the lowest at 22.6%—which still works out to more than 1.2 million people.
The CDC estimates that 75 million people suffer from high blood pressure—that’s one in three Americans—which greatly increases the risk of heart disease and stroke. According to the Anxiety and Depression Association of America, “72% of people who have daily stress and anxiety say it interferes with their lives at least moderately; 40% experience persistent stress or excessive anxiety in their daily lives; 30% with daily stress have taken prescription medication to manage stress, nervousness, emotional problems or lack of sleep; and 28% have had an anxiety or panic attack. And the average person sits 12 hours a day, prompting many physicians to identify sitting as an unrecognized disease.”
According to a CBS report, Americans spend about $35 billion a year on weight-loss products. And in 2017, U.S. fitness centers had a total membership of almost 61 million people, but 80% who join a gym reportedly quit within five months, and only about 18% will use their memberships consistently.
The reasons vary, but primarily people get discouraged when they don’t experience instant results. Working out the right way is harder work than anticipated or they can’t sustain motivation, among other factors.
So it’s really no wonder why Americans lack confidence in their health and fitness accountability, as reflected by how the survey participants overwhelmingly answered “no” to the question Would you be willing to have your life insurance premiums fluctuate based on the results of your yearly physical? (77.3% said “no”) and Would you be willing to wear a fitness tracker and submit reports to insurance companies if it means potentially receiving a better premium (59.3% said “no”).
This reticence is unlikely to change much in the near term. So, despite the rapid advances in personal fitness technology as represented by Fitbit and other smart wearables that can track everything from heart rate and steps taken, to quality of sleep and stress levels, these devices are not likely to play a significant part in determining life insurance quotes.
Conversely, the reluctance to make health information public has spurred the popularity of these “no medical exam” policies. Consumers have overwhelmingly opted for that option even when the procedures are more expensive than traditional medical exam options. The current survey results suggest “no medical exam” policies will remain an extremely successful product for life insurance companies into the foreseeable future.
- Privacy concerns remain high
A vast majority of consumers are not comfortable providing personal contact information such as email, phone numbers or even simply their names to get a life insurance quote.
The reason is two-fold. First, they don’t want daily phone calls from agents trying to sell them a policy. Second, the widespread practice of selling contact information to third-party marketers has led to email accounts overflowing with spam, a lot of which is laden with spyware and assorted malware.
If online insurance companies want to sustain growth, they need to provide quotes and information without requesting contact info.
- Consumers wary of Big Brother
Insurance companies need to do a better job of building trust with consumers and a good place to start is refraining from asking for personal financial and detailed medical information.
There is a deep concern that medical histories in general but specifically DNA information might be used to their detriment. There is also worry that sensitive medical information could be leaked to third parties such as credit agencies and employers.
Similarly only 18% of survey respondents would be comfortable sharing detailed financial information with insurance companies. The digital age and the ease of disseminating information has expanded our worldview while also heightening privacy concerns. So the more aware consumers have become about data mining, the more control they want over health and financial matters because the opportunities for misuse and abuse is so high.
The more confident consumers feel that a company is respectful of their privacy, the more apt they are to do business with that company.
Complete survey results are available here.
True Blue Life Insurance is an independent, online life insurance agency representing more than 50 life insurance companies nationwide. Mindful of privacy concerns, consumers can research polices on the True Blue website and get an instant quote that is fully guaranteed for the full term of the policy without providing any personal information. Contact them online at www.TrueBlueLifeInsurance.com.