Life insurance sales are sluggish, and the struggle to capture the elusive mid-market and millennial demographic persists. Insurers are searching for a way to turn things around.
As tech start-ups have entered the insurance market, shaking up age-old policy servicing and sales models, insurers have been forced to rethink their offerings. Not adapting is not an option anymore.
Some innovative insurers are starting to gamify elements of the customer experience as well as the value chain, like we’ve seen in other industries, from airlines to credit cards, which already have well-received loyalty programs in place that rely largely on game mechanics. Innnovative insurance companies are rewarding users with points and gift cards for completing courses or taking quizzes related to financial wellness and mindfulness, for example. This is their way of incorporating fun, engaging elements into policies as a means of meeting the insured where they are.
But are these new types of policies and customer engagement models taking hold?
Research conducted recently by the Harris Poll on behalf of SE2 and Life.io investigates if factors like rewards and engagement make life insurance more appealing both to those who already have policies and those who don’t. The findings found that the vast majority of the 2,000 respondents would share real-time wellness data with insurance companies through wearable devices in exchange for financial benefits like a lower insurance premium or wellness rewards.
The data also found that U.S. adults want their policies to be more interactive. Roughly two-thirds (68%) say that, if a provider offered a policy that included elements of gamification to reward healthy lifestyle and wellness habits (think: badges for hitting certain milestones, a leaderboard, financial rewards), they would be likely to engage in those elements. Additionally, 43% of U.S. adults say they’d be “much” or “somewhat” more likely to purchase a life insurance policy if the insurer offered an interactive program with wellness benefits (such as coaching and education) rather than just policy payout.
In terms of generation, over half (53%) of millennials (ages 23-38) say they’d be “much” or “somewhat” more likely to purchase a life insurance policy if the insurer offered an interactive program with wellness benefits. This is noteworthy given that life insurance sales have historically lagged among this group, according to previous research from SE2. Even baby boomers want in. More than one-third (36%) of boomers (ages 55-73) say an interactive program with wellness benefits would make them “much more” or “somewhat more” likely to purchase a policy.
Will Sweat for Discounts
The survey also found that a majority of U.S. adults seem to like the idea of exchanging wellness and lifestyle data with life insurers for rewards and improved lifestyle. They would share wellness data, such as steps walked daily (79%), blood pressure daily (76%), heart rates daily (74%), calories burned daily (73%) and sleep patterns each night (71%) for financial or health rewards.
In fact, those rewards could lead to lasting lifestyle and health changes. Eighty-six percent of U.S. adults say they’d be “much” or “somewhat” more likely to live a healthier lifestyle if a life insurance company offered cash back as an incentive in exchange for their real-time wellness information. Almost all (94%) of millennials say this would be the case for them.
Other incentives that would urge the insured to improve their lifestyle habits? There are plenty:
- 86% of U.S. adults say cash back would encourage them to live a healthier lifestyle
- 85% say a lower life insurance premium would encourage them to live a healthier lifestyle
- 82% say additional coverage or benefits would encourage them to live a healthier lifestyle
- 77% say wellness rewards would encourage them to live a healthier lifestyle
- 70% say wellness education/coaching would encourage them to live a healthier lifestyle
- 66% say financial education/coaching would encourage them to live a healthier lifestyle
See also: 3 Ways to Improve Customer Experience
More Frequent, Meaningful Touchpoints Matter
The importance of customer engagement cannot be overstated. The research found that policyholders want to hear from insurers more often, not just upon sign-up and for billing purposes. More frequent, personalized touchpoints are crucial for retaining and growing the insurer’s book of business. Higher-quality interactions can help build relationships, which leads to higher sales conversion, reduced lapse rates and referrals.
What to take from all of this?
Policyholders and prospective policyholders will no longer settle for the status quo. They want higher-touch customer service with more frequent touchpoints, policies that are more personalized and engaging and rewards that continue. These approaches can help turn around sluggish sales and lead to lifestyle and health improvements of the insured.
For insurers who aren’t willing to evolve their policies and engagement models to better meet consumers where they are, survey respondents stated that they would be willing to switch insurers. That’s not to be taken lightly.