Life Insurers Falling Short With Digital Offerings: J.D. Power Analyst

There are opportunities to adapt the life insurance sales process to take better advantage of digital technology, according to a J.D. Power analyst.

The only question is whether the will is there to make it happen.

"A lot of the digital that's been created for life insurance specifically is really simply taking an analog process and putting it on a screen," said Robert Lajdziak, insurance business consultant for the Insurance Practice at J.D. Power. "It's not creating a new process that takes advantage of the capabilities that a digital experience can have."

According to the J.D. Power 2020 U.S. Insurance Digital Experience Study, insurers have made across-the-board improvements in clarity of information, but many still struggle with the balance of too much information and a minimalist approach.

Significant investments in direct-to-consumer website and mobile design have helped property and casualty insurance companies emerge as an industry leader with improved digital service and shopping experiences.

"One of the key takeaways for digital being successful is that it does have to address a pain point," Lajdziak said. "You can't just take an analog process and put it on a screen and expect it to be a success. It really does have to change the the experience for consumers."

The banking industry can serve as a guiding light for life insurers, he added. Banks made little impact digitally with customers until mobile check depositing became an option.

"That actually solved a pain point for customers," Lajdziak said. "No longer did they have to go to a physical place to deposit a check. They could do it in their own home on their phone instantly."

'A Real Demand'

With the COVID-19 pandemic restricting in-person access, consumers are more eager than ever for digital options, Lajdziak said.

"We definitely see a real demand for customers to have more control over their policy, better insights and information," he explained. "We've seen a big shift in customers wanting that at their fingertips rather than setting up time to talk to somebody to understand their policy."

But that does not mean that agents are left out of the equation. Consumers say they also want human interaction and someone with expertise to either confirm their choices or explain why they should consider another option, Lajdziak said.

He compared it to the changes self-directed online trading platforms such as TD Ameritrade are having on the financial advice industry.

"It opened up a new market," Lajdziak said. "Advisors really had to change their value proposition from being portfolio managers to full-on financial advisors, and in helping with clients' vast or diverse needs and goals and goal setting and things like that."

The J.D. Power study examines the functional aspects of desktop, mobile web and mobile apps based on five factors: ease of navigation; appearance; availability of key information; range of services; and clarity of the information. The study was conducted in partnership with Centric Digital, a leader in digital intelligence, and Corporate Insight, a leading provider of competitive intelligence and user experience research to the financial services and health care industries.

“The line between brand and digital brand is rapidly disappearing as the lion’s share of insurance shopping and customer support interactions move to digital platforms,” said Michael Ellison, president of Corporate Insight. “Increasingly, insurers’ ability to balance providing the right information at the right time in a format that represents their unique identity will be the key differentiator that separates industry leaders from the rest of the pack.”

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]. Follow him on Twitter @INNJohnH.