Find success in cross-selling life insurance

Multiline agents can deliver the trifecta of products: auto, home and life insurance. They — as well as consumers — can benefit from doing so. A recent LIMRA study confirmed that multiline customers are more loyal and likely to recommend their insurance company than other customers (as reflected by a strong Net Promoter Score of 64). In comparison, customers who solely have auto insurance or a combination of auto and homeowners insurance had scores of 32 and 36, respectively.

Results show that multiline customers are not just loyal because they also own life insurance; they tend to have a “stickier” nature to begin with. The research shows multiline customers are:

» Informed and discerning decision-makers. As with most of their other purchases, multiline customers do their research when selecting their auto insurance carrier. These customers prioritize factors such as the carrier’s reputation and having an accessible agent, rather than focusing on price. Only 12% of customers who have life coverage with their auto carrier say price was the top reason they initially chose the company for auto coverage, compared to 30% of those who do not have life insurance with the carrier.

» Self-reliant and independent. Multiline customers recognize the expertise of auto insurance agents in life insurance matters, and they value accessibility and convenience in their interactions with financial professionals and companies. But they also rely on their own knowledge and judgment when making financial decisions.

» Different demographically. Multiline customers tend to be younger and wealthier and possess a higher level of education compared with some other customer groups. Additionally, a significant proportion of multiline customers have children under 18, indicating a potential need for family-focused coverage such as life insurance.

LIMRA’s study also sheds light on some of the challenges multiline agents and carriers face, including customers’ lack of awareness about the life insurance offering. Where offered, less than half of those with auto insurance (45%) are aware that their carrier also sells life insurance.

The findings also highlight the positive outcomes resulting from efforts to address this challenge. Awareness increases with the duration of the customer relationship, having someone they consider their personal auto agent and the frequency of contact.

Customers who remember their auto agent or a company representative talking to them about life insurance are more likely to have a positive perception of auto insurance agents’ competencies when it comes to life insurance. A majority believe auto insurers should be talking to their customers about their life insurance needs.

Initiating the discussion

Half of customers who recall discussing life insurance say the agent initiated the conversation. The other half either reached out themselves or were contacted directly by the company. As you’d expect, motivated customers who initiated the conversation were more likely to purchase coverage (70%) compared with those who were contacted by an agent or the company, at 37% and 23%, respectively.

Customers initiating the conversation were often motivated by acute needs or life events. Nearly half of all customers who remembered discussing life insurance say the topic came up during their initial meeting with the company or agent. While conversations often began over the phone, customers who remember in-person contact were the most likely to buy.

It’s important to understand the reasons customers choose to purchase or decline life insurance from their auto carrier after discussing the product. It’s not all about price. Company reputation, having the right product and the presence of a helpful local agent are mentioned most often. Conversely, customers who did not purchase life insurance from their auto carrier often cite reasons similar to those for not owning life insurance in general — lack of need or interest, timing and affordability.

Donna B. Chaffin is associate research director, distribution research, LIMRA. She may be contacted at [email protected].