Online life insurance cycle time must stay short – Digital Insurance
Two years in, the impact of the COVID-19 pandemic on the insurance industry appears to have two overriding factors. First, it’s increased the average person’s desire to seek out insurance products in case of similar world-upheaving emergencies. That’s good for carriers in businesses like life insurance, where the mantra has been that the product is “sold, not bought” for years.
But at the same time, the digital-interaction ramp-up driven by social-distancing practices has yielded a consumer base expecting frictionless online experiences for purchases and service. That’s more challenging for insurance carriers, who require a large amount of customer data up front to kick off an application, as well as potentially more information during the process.
It’s in that context that AiteNovarica conducted its Life Insurance Buying Experience consumer, surveying more than 500 consumers who bought life insurance between January 2020 and August 2021. It covered all kinds of purchase methods from agent to self-service digital and hybrid approaches.
Customers who completed the buying process generally found it less cumbersome than they expected, the report says. However, when it comes to delivering the policy, satisfaction drops precipitously when policies take more than a week to arrive. For buyers who got their policy in a week – representing a quarter of those surveyed – 65% said they were “Very satisfied.” For one to three weeks, representing closer to half of those surveyed, the “very satisfied” proportion was 37%. More than that – the final quarter of those surveyed – it dipped to 29%.
Retaining digital customers
After buying the policy, the greatest plurality of customers (45%) indicated that they would be interested in their life insurance company offering a “reward program related to my health and activity level”, according to the research. This was followed by tools to manage financial needs and information on other products (42% each).
This represents an opportunity for life insurers to better leverage their mobile apps, the survey authors contend. While 70% of insureds are aware of their insurers’ mobile app, only 37% say it would be their first choice for communication with their carrier.
“Simply having a mobile app is not enough, and insurers’ apps must support service transactions and provide interactive content that makes the policyholder want to return,” the report says. “Due to its usage growth, mobile is the best channel for engaging customers with rewards, product offers, personalized recommendations, and wellness programs.”
