Selling Life Insurance to Digital Consumers

When we started PolicyGenius, an independent digital insurance broker, last summer, we braced ourselves for a high-speed education on the finer points of the consumer insurance market--and boy did we get it. We previously consulted for the industry, but even that doesn’t prepare you for all the work that happens on the ground, like filing for licenses on a state-by-state basis, or spending a holiday manually preparing and sending out illustrations because of a last-minute surge in quote requests. (Or dealing with fax machines.) But learning all the nuances, even the bewildering ones, has been an amazing experience. It’s exciting to be involved in an industry right at the start of its transformation into the next phase of doing business. We hung out our digital shingle in July 2014, and thanks to our smart shopping and decision-making tools, as well as some extremely positive exposure from the national media, we’ve enjoyed 30% month-over-month growth in our user base. In the process, we’ve had 12 months to learn a lot about the modern digital insurance customer. Here are six takeaways that agents and carriers can benefit from. 1. Babies are still the No. 1 trigger for buying life insurance--which means there’s still plenty of opportunity to educate consumers about other equally important life events. It’s no surprise that having a baby motivates a person to buy life insurance. Our own data shows that among customers who take our Insurance Checkup (our online insurance advice tool), the number of those who already have life insurance jumps by 20% if the customer has a child. In a survey we commissioned last year, we found that consumers place insurance fourth in line behind saving for retirement, paying off debt and following a budget. Life insurance should be a key part of any long-term financial strategy, but a lot of people still don’t realize that. The survey also suggests people don’t recognize the financial challenges that accompany other big life events like marrying, buying a home, starting a business or becoming a caretaker for aging parents. Our takeaway: Buying life insurance for your baby is a given. Now we need to focus on bringing these other invisible triggers to our customers’ attention. 2. Couples do it together. A State Farm survey a few years ago found that 74% of people rarely talk about life insurance, in part because it’s an uncomfortable subject to bring up with one’s spouse. But we’ve repeatedly seen one half of a couple begin a life insurance application with us, and then shortly thereafter we get an application for the other half. In fact, around 20% of our life insurance applications have a partner application associated with them. Our takeaway: Once an applicant sees how easy we’ve made it to shop for a policy, she decides to take care of her partner’s policy while she’s at it. It saves time, and it prevents couples from having to talk about the subject too much or revisit it again any time in the near future. 3. Digital insurance consumers are thoughtful shoppers who appreciate honest advice. Our average customer spends 9 1/2 minutes exploring her PolicyGenius Insurance Checkup report. According to Adobe’s Best of the Best Benchmark report from 2013, the average time spent on a site in the financial services category is just more than six minutes! Our takeaway: If you give the customer intuitive educational tools and advice tailored to her financial needs, and you don’t ask for anything intrusive in return (like a phone number), she’ll become more engaged. We’ve seen this later in the shopping cycle, too, when customers look into the reputations of prospective insurance companies. But more on that below. 4. Digital insurance consumers are happy to do most of the work on their own. If you’ve been a part of the insurance industry long enough, you’ve probably heard the saying, “Insurance is not bought; it’s sold.” In other words, industry veterans believe that you have to sell (and often pressure) consumers, who wouldn’t otherwise purchase on their own. We founded our company on the theory that this isn’t true, and now we know that there are people out there who independently come to the conclusion that they need life insurance. We’ve found that customers who come to our site want to go all the way through the application process on their own, with no agent intervention. They self-navigate through decisions about coverage and carrier selection on our site, using the jargon-free content and tools we’ve built to make the path easy. It may not be as easy and fast as buying a pair of shoes from Zappos, but we’ve worked hard to make the process reliable and trustworthy. But not every self-serve life insurance experience is smooth, which is why it’s important to have human help when needed. One client told us in a follow-up thank you that it was “comforting to have someone on my side in evaluating different insurance carriers and working to get me approved when the first insurer turned me down.” Our takeaway: If you make insurance easy to shop for, you don’t have to focus so much on the hard sell. 5. Digital insurance consumers are not just Millennials. Everyone likes to talk about the Millennial consumer these days, but we’ve discovered that the digital insurance consumer isn't defined by any one generation. It’s true that Millennials (< 35) make up about 50% of our user base; however, Baby Boomers (50+) make up 20% of our user base, and Generation X (35-50)--who spend more online than Boomers do, according to a recent BI Intelligence study--fill out the rest. Our takeaway: To reach such a wide range of online consumers, we have to focus on values that have universal consumer appeal--honesty, speed and self-service that’s backed by amazing customer support. 6. Insurer financial strength and reputation are important. When you’re shopping online, you’re used to seeing reviews and ratings. It’s one of the ways online consumers compare products or services that they can’t see face to face. Customers frequently ask us for insurance company ratings and customer reviews. And they ask for help choosing a carrier when all the ones they’re considering have approximately the same rating, or if customer reviews are inconclusive. We’ve been asked, “Who is the largest insurer or has been around the longest? I don’t want anyone that will go out of business.” They take financial strength ratings, brand strength and reviews seriously, and factor them in when deciding which policy to buy. It’s so important that we’ve added one-page “report cards” into our life insurance quoting process to help answer these questions. Our takeaway: Insurance companies don’t have to worry about digital platforms like ours commoditizing their policies and encouraging consumers to shop only on price. While price is important, it’s not the only factor that consumers consider when buying a life insurance policy. As an industry, we still have a lot to learn about selling insurance to the digital consumer. And as an online broker, we’re still learning valuable customer insights from fellow brokers and agents throughout the industry. It’s true that everything we’ve learned in the past year has helped us confirm many of our initial propositions, but it’s also helped us better understand how to win over today’s insurance shopper. We can’t wait to see what the next 12 months brings.