Insurers Need A Dash Of Amazon To Modernize Approach

BALTIMORE -- Finding the magic "customer-centric" formula has proven elusive for insurers across the board.

While their premium count remained high, insurers could afford to err on the side of caution. Those days are dwindling and insurance marking departments are trying to be bold with new marketing initiatives that make use of technology and other advances.

Todd Silverhart of LIMRA will moderate a session on "Managing Customer Experience" today at the 2018 LIMRA Marketing Conference. He will be joined by Sybil Covell, director of client experience and retention with Western & Southern Life.

The industry is long overdue to adopt some of the customer-friendly tools that are improving the shopping experience for virtually everything that we buy, Silverhart said.

With life insurance, "the cards are sort of stacked against (potential customers) to begin with simply because of the difficulties and challenges in applying for the product and the hoops we make customers go through," said Silverhart, director of insurance research at LIMRA.

The nature of life insurance is "being something that in many cases doesn’t require much engagement or involvement on behalf of the product owner over the course of the product," he added.

But, of course, studies show that people want life insurance, especially around the big grown-up events like getting married and having children. So the key is making it easier for customers to find insurers.

LIMRA surveys show that 83 percent of insurers have "customer-experience initiatives," or multiple efforts designed to improve the relationship to the customer, Silverhart said.

"Most of the remaining (insurers) are evaluating initiatives," he added.

The same survey revealed that insurers are devoting a median number of four full-time employees to "customer experience" efforts. An important step for insurers is to define who their customer really is, Silverhart said.

“Companies have debated forever whether or not their customer is the end user, the policy owner, or whether it’s their distribution partners," he said. "I think to some extent, that unclarity on who the customer really is may have prevented some companies from really seriously pursuing becoming customer centric."

The policy purchaser and the end user are not always the same person, Silverhart said, and insurers are acknowledging that fact.

Interestingly, companies are not too satisfied with their own efforts regarding customer experience, the LIMRA survey found. Forty-one percent say they are "slightly behind the competition."

Asked to name an insurance company doing very well with marketing to customers, respondents named USAA, Silverhart said. USAA -- which provides insurance, retirement and investment services to military personnel and their families -- has used marketing and analytics to reach new heights in recent years.

USAA undertook a massive marketing campaign in 2009 after broadening its services to include military families. Its customer research methods include spending entire days with military veterans to better understand their needs.

Among all businesses, respondents cited Amazon for being most in tune with their customers' needs, Silverhart said.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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