The New Kitchen Table: Prospects ready to hear about life insurance — where they live

Prospects ready to hear about life insurance — where they live

Who’s to blame for life insurance ownership falling to a 50-year low? Implicate the economy, which has hurt the housing market, incomes and retirement funds and provided a new set of rules for what job security really is and means to people. And point fingers solely at consumers.

It’s possible that today’s consumers are bred to be more narcissistic than in years-past or perhaps believe they are immortal. Blame the Twilight series for the latter and reality TV for the former. But the debate about life insurance or the lack thereof— something so beneficial in protecting against the  inevitable — can be caused by a multitude of reasons. Regardless the varied reasons, whether business is blossoming or taking a major hit, life insurance carriers must adopt new practices, lingo and channels to sustain success or acquire it—just like other businesses.

According to Acxiom’s “Life Insurance Consumer Dynamics Study,” four out of 10 adults have no coverage. And one of 10 relies solely on policies from others, including employers. Nearly half of adults fall into one of two categories: uninsured or underinsured.

Unlike auto insurance, life insurance is a discretionary purchase. But since death is inevitable, why is there a consumer disconnect between it and the importance of life insurance? It seems to be an issue of communication, at least in part.

Are today’s life insurance marketers truly leveraging all the tools available to them to engage their customers or prospects? A key finding in Acxiom’s survey is that many life insurance marketers may simply be underutilizing digital media channels as a supplement to engaging with today’s consumer. Rather, they are relying on traditional marketing practices that still work for some consumers but fail to leverage opportunities offered by the newer online options.

The study also found that Millennials and Gen-X are both still responsive to direct mail pieces about life insurance, yet they consider email and web-site interactivity to be acceptable alter-natives. Politely positioning your life insurance offerings via digital channels to busy consumers can possibly go further than forcing them to sift through all the glossy, irrelevant noise that’s been batched and blasted into their mailboxes.

For instance, fast-moving Millennials have a lot of firsts that need to be accommodated —marriage, child, home— all of which should motivate them to purchase life insurance. Gen-X, on the other hand, is usually on the second round of everything—perhaps divorce or another marriage, a second home and more children. And in today’s economy, boomers are either settling down or remaining revved up to support themselves or help support their adult children and/or grandchildren. The point is: most carriers already offer products to accommodate consumers during all of life’s stages. The key is connecting the right message with the right digital channel to engage consumers in meaningful dialogue about life insurance that leads to conversion.

Perhaps five or 10 years ago, life insurance marketers could debate whether their audience was online or not. But the truth is that they are there now— and not just for celebrity gossip or retail shopping but to educate themselves on a variety of things, including life insurance. Aside from the Millennials and Gen-X and probably contrary to other research and some expectations, boomers are using and being influenced by these channels:

  • 68 percent of Millennials used social media as part of their life insurance shopping process
  • 43 percent of Gen-X conducted searches online to find information about life insurance
  • 33 percent of boomers report online information was among the top three influencers in their final decision

Additionally, boomers are becoming seniors at a rate of 10,000 per day for the next 20 years. Brace yourself for the influx of digitally savvy seniors in the coming years.

Using Digital It will serve life insurance marketers well to embrace emerging digital channels such as Internet ads, email and social media to connect with today’s empow-ered consumer. They are smart, savvy and you can’t sell them anything — overtly anyway. They want to educate themselves and will raise their hand when they want attention. Carriers have to start by implement-ing a technology solution that cap-tures demographic and behavioral data from their email marketing campaigns and website. This will help them build an online presence that listens and responds to the behaviors of consumers, allowing them to better engage in relevant dialogues. It is a pull over push.

When consumers search and shop for life insurance information online, there is no threat to the industry. It does, how-ever, unearth a bevy of opportunities for carriers and marketers to flex some creativity and analytical muscle to convert shoppers. People use social media channels like Facebook and Twitter to catch up with friends and family to discuss the latest happenings.

But take these interactions a step further and understand that consumers, especially Millennials and Gen-X, are also using social channels to solicit advice from family, friends and col-leagues about life insurance. Research indicates these two demographics are engaged with their networks at the beginning of their analysis or during the evaluation of options. Gen-X is more likely to reach out for final validation of what they planned to do while Millennials appear more likely to seek affirmation of their decision after the fact. (Put the senior demographic aside for now when it comes to chatting online about their life insurance decisions, but a solid strategy to engage this group in the very near future is a smart thing to keep in your marketing arsenal.)

It’s not necessary or recommended that you abandon traditional methods. Your digital marketing strategy should augment or integrate with your current marketing practices, while expand-ing your multichannel efforts at reaching consumers. If you’ve used direct mail programs over the years, use these insights along with your other data to begin segmenting your target. Then, assimilate emerging media channels to effectively and efficiently deliver more personalized, relevant messaging to each audience. Email, for example, allows marketers to leverage an understanding of different types of customers to deliver messages that resonate. Achieve this by mapping unique content to the buyer based on information they’ve identified as an interest to them.

Though getting consumers proper life insurance coverage is the goal, once this is done, there may be opportunities to focus on the underinsured consumers or up sell other forms of insurance products. Boomers may benefit from more options such as long-term disability, long-term care and Medicare supplements. In accordance with survey data, 10 percent of currently uninsured Millennials and Gen-X may represent more than five billion dollars in opportunities, and converting just 10 percent of uninsured boomers may be worth as much as three billion dollars in annual premiums. Incorporating digital alone isn’t a panacea for the life insurance industry. But, it could prove to be the critical ingredient to achieving sustainable growth.

Clark Wooten is vice president and market group leader for Acxiom, the insurance and investment services firm.

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