MetLife recently announced a new set of online life insurance tools (www.metlife.com/straightstory). While online tools are not especially newsworthy, the change it represents in the life insurance sales model is far more wide reaching. Calculators can be are easily built; sales model adjustments are hard. We have witnessed the effect Progressive and GEICO had on the auto insurance sector; can we expect the same changes in life insurance?
For so long, insurance has been sold through distribution networks and agents. The role of the website has been to compliment that approach. The consumer, on the other hand, is turning more and more to the internet to get answers with a less than stellar experience.
According to Beth Hirschhorn, senior vice president and chief marketing officer for MetLife, “Buying life insurance is challenging for even the most motivated. Of those people who say they will buy life insurance, research shows that more than 80% will fail in their attempt.”
Part of the problem for consumers is the disconnect between what they want from a website and what is provided. Companies are hesitant to provide information online that could make an agent call redundant – after all people buy from agents, and research is clear on that point. Consumers however have simple questions not addressed:
- What type of insurance is right for me?
- How much coverage do I need?
- How much will this cost?
Consumers often assume coverage will be expensive and the lack of easy-to-find cost information halts the buying process early on. Those who want to proceed on to buy are often hesitant to engage with an agent too early and are then confronted a complicated and cumbersome process.
There is however, a very willing marketplace. According to Strategic Research Insights Macromonitor Consumer Study, nearly six in ten middle class households recognize the need to increase their life insurance and half of these households intend to buy coverage in the next year.
MetLife’s new online tools are intended to make it easy to get a no-obligation quote without entering personal information (and without any sales pressure). They have added instant response options such as “Click to Call” and “Click to Chat” to help consumers get immediate answers to questions.
According to MetLife, they want to provide consumers with “an experience that’s intuitive, relevant and groundbreaking in its simplicity”. Life insurance and simplicity are rarely used in the same sentence.
“What’s good for the consumer is good for MetLife. By spending months ‘walking in our customers’ shoes,’ we recognized the buying process was less than ideal. That’s why we are changing the customer experience now with more improvements to be introduced in the near future,” added Hirschhorn.
So what happens to the sales channel? The channel may change but that is going to happen anyway, it must. Some of the key questions for carriers are:
- Will a consumer that has a clearer idea of their need be more inclined to buy?
- Will your prospects look elsewhere to get educated and quotes, if so will they return?
- Will consumer still buy from agents but from those companies that work with them through the initial quoting process?
The growth of online aggregators shows that consumers want to comparison shop and are willing to disclose a lot of information to do so. The question is whether carriers can afford to stay on the side during this process. Much of that comes down to brand or agent loyalty but unfortunately, loyalty is at an all-time low.
