A recent increase in consumer interest in life insurance products is largely due to a new federal tax code change that allows policyholders to build more cash value in their policies and the COVID-19 pandemic.
The American Life Insurance New Business Study, published by J.D. Power, indicates that “insurer brand perception - specifically the impression of long-term viability of the insurer - is the No. 1 attribute influencing life insurance shoppers to choose one brand over another.”
Life insurance is not like other types of insurance. Even though traditional factors such as cost do matter when it comes to buying an insurance policy, one of the most important aspects is the longevity and viability of the brand, according to Robert M. Lajdziak, director of global insurance intelligence at J.D. Power.
This can make it very difficult for companies when they are competing against others that have existed for decades, such as New York Life which just celebrated its 175th anniversary, and it’s also challenging if a company decides to rebrand its image.
The study of 2021 revealed the following findings:
Conversion rates for quotes and purchases increase in 2021:
In an industry-wide reversal of a 30-year decline in life insurance ownership, quotes have increased four percentage points year over year, and buys have increased four percentage points as more consumers are seriously shopping for policies.
Consumers identify the top three life insurance companies unaided by their brands - State Farm, Allstate and Prudential - known for their advertising jingles, taglines and logos. In recent years, life insurers have increased their spending on advertising and these investments are reflected in brand awareness trends.
The application process is a key component in the sales funnel:
The best insurers in the acquisition funnel are also those with the highest customer satisfaction scores within the application process. Policy execution speed is the single most important aspect of the acquisition funnel.
A high price is the greatest barrier to purchase:
Brand perception drives purchase decisions, but the price is the biggest barrier to purchasing life insurance policies. More than three-quarters of life insurance shoppers say the cost was too high in 2021, up from 28% in 2020.
A new study is measuring shoppers' experiences across the nation's largest life insurance companies as part of the 2021 US Life Insurance New Business Study. The study measures overall customer satisfaction by measuring how customers perceive the application process. Shoppers can provide feedback on the application process and the quote process for up to five brands at a time, though only one brand is required for participation.