Consumers Shopping Digitally, But Still Using Advisors

COVID-19 is a big reason why consumers are shopping for life insurance. But in a world where more business transactions are done online than ever before, are consumers finding that it’s still relevant to buy life insurance through an advisor?

LIMRA research found that consumers are engaging with life insurance digitally, but still valuing the human connection. The findings of that research will be presented during the session, “How 2020 Is Shaping The Future of Life And Annuities Customer Experience” during the 2020 LIMRA virtual annual conference on Monday.

LL Global and Boston Consulting Group formed the Customer Experience Executive Task Force in late 2019, but redefined the task force’s scope in April 2020 to reflect how the pandemic is shaping the customer experience evolution. The research included surveying 3,800 consumers and interviewing life insurance experts globally, said Todd Silverhart, LIMRA corporate vice president and moderator of the session.

Consumers had several reasons for shopping for life insurance, and COVID-19 was the second most popular reason given, Silverhart said. Nearly one-third (32%) of those surveyed said the virus was their reason for looking at coverage, compared with 38% who said they believed it was time to consider obtaining coverage.

Other reasons given were advice from friends or family (29%), a life event such as marriage or birth of a child (22%) and the death of someone the consumer knows (20%).

Prior to COVID-19, 43% of consumers completed their life insurance purchase in person, Silverhart said. That percentage dropped to 32% after the pandemic hit.

But Silverhart said the research is pointing more toward what he called “a hybrid with an online element.”

“That's a combination of technology, high tech and high touch,” he said.

He described the trend as “technology in addition to working with an advisor, as opposed to technology instead of working with an advisor.”

Stronger Than Ever?

Researchers thought the role of the advisor might be diminished in the midst of a pandemic, Silverhart said, “but that doesn’t seem to be the case at all. And the role of the advisor seems as strong – if not stronger – than ever”

Nearly one in three consumers (28%) said they had used a combination of in-person and online elements to shop for life insurance prior to COVID-19. That percentage rose to 38% in the wake of the pandemic.

More baby boomers and millennials shopped for life insurance in person, the research showed, with 43% of millennials saying they shopped via an advisor and 36% of boomers using an advisor. But Generation X preferred using the hybrid of in-person and online, with 42% saying it was their method of shopping for coverage.

Advisors are still perceived as adding value, the research showed, with 97% consumers indicating they were satisfied with an advisor’s service, versus only 22% saying they were satisfied with a web callback.

What does this mean for the future of the advisor as COVID-19 continues to be a factor in our everyday lives? Here are four key takeaways from the research.

1. The acceleration of insurers’ digital agendas will continue.
2. The human touch will remain critical, but it will take a different form.
3. The use of accelerated underwriting will expand further.
4. It is unclear whether the increased consumer awareness of life insurance will translate into actual sales.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.

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