People Love Their Insurance Agent, Study Shows

By Linda Koco
InsuranceNewsNet

NEW ORLEANS – LIMRA researchers have been noodling around with the question of how customers feel when beneficiaries undergo the experience of filing a death claim, so they decided to do a study. What they found out is not what they expected.

What they found is that 95 percent of the claimants were satisfied with the experience, said Jennifer Douglas, associate research director-developmental research for LIMRA.

In addition, 72 percent said that their life insurance claims experience was easier than all the other administrative tasks they had to perform following the death, Douglas indicated in an interview prior to her presentation on life claims here at the annual Life Insurance Conference. The conference is co-sponsored by LIMRA, LOMA, American Council of Life Insurers and Society of Actuaries.

“And when the agent was involved in the claims process, claimant satisfaction was the highest,” Douglas added.

In fact, at the top performing companies, agents earned a higher “net promoter score” (53) from the claimants than their company (49).  (The scores are considered a measure of customer loyalty and likelihood to recommend to someone else; a score of 50 or higher is considered excellent.)

At average performing companies, the agent score was 40 and the company, 17. At below average companies, the agent score was 16 and the company was zero.

“It’s clear to us that Americans really love their agents,” Douglas surmised.

Flabbergasted?

The researchers did not expect all those positive strokes. They thought the tarnished image of the insurance and financial services business in the post-recession years might have influenced claimants to be less positive about their claims experience, Douglas explained.

In addition, the researchers expected a type of carry-over in attitude might show up in the findings, with consumers applying negative feelings about other insurance industry practices to the claims experience they had in the life insurance industry.

That has happened before, she indicated.  For instance, LIMRA’s 2012 Life Insurance IQ survey found that 60 percent of adults believe that life insurance companies collect medical information about applicants so that the companies will have evidence of a pre-existing condition that will enable them to deny coverage. “But of course, that’s not true; life companies collect medical information for underwriting,” Douglas said.

What could have happened, in that situation, is that the survey respondents may have carried over to the life insurance business some negative notions they developed based on reports of claim denials in other types of policies. But that didn’t happen in the claims survey.

Extreme satisfaction

Instead of encountering a blast of negatives, the LIMRA researchers found themselves inundated with bouquets of positives. “Sixty-four percent of claimants we surveyed last fall said they were ‘extremely satisfied’ with their claims experience and 31 percent said they were ‘satisfied,’ ” Douglas said.

LIMRA also found an intriguing link between claims satisfaction and interest in purchasing a product from the carrier. For example, the extremely satisfied group turned out to be four times as likely as the satisfied group to purchase a product from the company, Douglas said.

“The extremely satisfieds are also three times as likely to recommend the company to a friend, and two times a likely to believe that life insurance fills a critical role following a critical death.”

This suggests that the extremely satisfied claimants have an excellent impression of the company, Douglas observed. “That points to more sales opportunity.”

The top performing companies earned better scores on many measures, from satisfaction to being easy to reach, timeliness of response, taking ownership and more. That was the case even when their scores were the same or similar to lower performing companies. 

For instance, the number of days it took for all claimants to receive their payments had a median of 19 days, yet the satisfaction scores for the top performing companies that had a median of 19 days were higher than for the lower performing companies that also had a median of 19 days.

“The only difference we can see is that the high performing companies seemed to take the extra time to make the connection with the claimant,” Douglas said.

By comparison, with the lesser performing companies, the claimants tended to say they didn’t feel they knew the company and so they would be less inclined to recommend it to someone else.

You’re so caring

Another surprise was that the beneficiaries wrote comments all over their survey forms. The surveys were done on paper, Douglas noted, so people weren’t confined to a survey box on a computer screen. It appears they took the opportunity to write comments wherever they wanted.

Douglas said she was amazed not only to see all the comments on the forms, “some of them filling up all the white space on the page,” but also to see that an overwhelming number were positive and personal. Many of these comments spoke a how “caring” a company representative was in helping the claimant.

Some talked favorably about the company people who helped them. “They said things like, ‘They called me right away. They were wonderful.’” They praised their agents and people at the agencies, too, often by name. “They wrote that, ‘They came to my house. They came out to the car. He went to the nursing home.’”

One claimant wrote, “Customer service was very friendly and professional. Thank you for caring.”

Another wrote that “Mark and the girls (at the agency) are like my family. They are always there for me and for us when Ed was alive. They reached out for me.”

Younger people who are looking for meaningful work might want to consider becoming an agent, Douglas suggested after reviewing the comments. “It’s a good job, and fulfilling.”

The session on claims starts at 2:15 p.m. today.

Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at [email protected].

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Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at [email protected].