To cover more people for life insurance, the life insurance industry needs to stop building policies that producers want to sell and start building products that consumers want to buy, according to Bobby Samuelson.
That’s one of the key points he raised during a presentation on cash accumulation products at this year’s annual meeting of National Association of Independent Life Brokerage Agencies (NAILBA) in Hollywood, Fla. The vice president for life product development for MetLife, he spoke with InsuranceNewsNet about the issue in advance of his formal remarks.
“The industry has had over 10 to 30 years of innovation, but the net effect is that fewer life products are being sold today than before,” said the Charlotte, N.C., life insurance executive.
“In the same period, we’ve fallen dramatically in premium growth, when measured as a percent of Gross Domestic Product or percent of investable assets.”
How to turn this around
He believes the industry can and must take steps to turn that around.
To do that, life carriers will need to rebuild approaches in four key areas -- products, underwriting, administrative platforms and marketing. These must be geared toward customers rather than producers, he said.
In terms of products, people want to buy from companies that gear their products to what consumers want to buy and in the way they want to buy, Samuelson emphasized. To this end, the products must be “more simple, transactional and transparent,” comparable to mutual funds in that way.
The goal should be to spur consumers to choose a product, rather than to be sold a product that the producer wants to sell, he said.
As for underwriting, the focus should be on making it easy for the customers to answer the underwriting questions and on creating a short turnaround time. That goes with making the purchase process more transactional in nature. This doesn’t remove agents from the sale, he said. Instead, it frees up their time so they can reach more consumers.
Where administration is concerned, greater efficiency should be the target. “Why does it take so long to complete the sale?” Samuelson asked. “Why do consumers have to wait two weeks or more to get a decision?” Those are some questions to address, he said, adding that the administration should happen in real time.
As for marketing, a lot of carriers distribute “glossy brochures” to market their products. But too many of them “don’t communicate the value of our products,” Samuelson said.
Many people want to check out a product before they decide to buy, he explained. They want to get “independent and objective information about it” either online or from company materials. But life insurance in general is “not Google-able” for that purpose, Samuelson said. “There is no way to check out a review of products online or to find out what a product is and does — both the upside and the downside.”
Consumers don’t want brochures that tell them why they “should” buy a particular product, he said. Rather, they want transparency, whether in a brochure, a website or other communication. “They want materials that say, ‘Here’s how the product works,’ and they want it in language that most people can understand.’”
Such materials need to show the consumer “what this product does for you,” he said.
Who is the competition?
The industry has tried to increase sales by creating products that attract producers who want to sell them. But that indicates they are competing with other carriers by “trying to steal market share from someone else,” he said.
“Our competition is not another product. Our competition is the consumer who does not own life insurance … and anybody who does not believe in life insurance.”
Those competitors often include wirehouse reps who don’t like life insurance, he said.
In Samuelson’s view, much of the marketing in the life insurance industry aims specifically at life insurance agents. That will continue but the carriers need to market to non-life insurance people too, and the non-life insurance producer marketing “should be entirely different,” he said.
“We need to reach people who don’t sell or buy life insurance now. These are people who don’t wake up in the morning with a plan to sell life insurance, or with any intention of buying life insurance.
“To gain relevance and ‘convert the unbelievers,’ the industry needs to rebuild its approaches in all four areas — products, underwriting, administration and marketing. The old ways don’t work anymore. We have to re-think everything.”
This is not just for MetLife or a few select carriers, he added. “The entire industry needs to get onboard with this, and stay onboard.”
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda may be reached at [email protected].