Alternate Distribution Channel

Life insurance sales strategies are in need of a change if insurers ever want to saturate the middle market.

That was the focus of just one session at the 2013 LIMRA Annual Conference held Oct. 21-22 in New York. Speakers Todd Silverhart, corporate vice president and director of insurance research at LIMRA, and Manish Bhat, MetLife's senior vice president of global brand and digital marketing, spoke to how middle-income households are less likely to buy life insurance even though they know they need it, and how partnering with retailers may be the future of life insurance sales.

Referencing the 2013 Insurance Barometer Study, issued by LIMRA in partnership with the LIFE Foundation, Silverhart noted that though most consumers understand the need for life insurance (85 percent), many will not purchase a policy. The reason? Well, there are many, but a few are noted below:

"People don't really understand what company they should be going with and what policy to buy," said Silverhart. "Procrastination is another factor of course."
So what are the triggers that prompt people to purchase a policy? According to LIMRA, those are:

• Life event (41 percent)
• Planning event (25 percent)
• Financial advisor intervention (24 percent)
• Work-related event (23 percent)
• Media (18 percent)
• Family/friends intervention (12 percent)

With that said, how do life insurers reach the elusive middle market?

The key here is "find them where they shop."

According to the barometer study, 17 percent of those polled said they would be willing to purchase life insurance from a retail outlet.

"Seventeen percent may not sound like a lot, but a 17 percent increase in sales is not small," said Bhat. "When Amazon started, how many people thought they'd buy their books there instead of a bookstore?"

Bhat then referenced an article that suggests the life insurance industry needs more modern distribution channels. The kicker? The article was from the Journal of Marketing -- dated 1959.
Bhat notes that demand is not the problem, as 50 percent acknnowledge they don't have enough life insurance.

"This is something we can't solve with more agents -- there's just not enought of them," said Bhat. "Something must change."

Knowing that much of the middle market customer base is at large retailer - offering life insurance through easy-to-use kiosks set up in the pharmacy section of some stores. Though still in its testing phase, MetLife has noted that it has become the largest term life insurance channel at MetLife by application volume.

Maybe it's time for an industry that has remained practically unchanged from the start to venture into parts unknown. A stagnant industry is a troubled industry.

"[Life insurers themselves] set up this life insurance buying process to be what it is," said Bhat. "We created the problem."

Now it's time we solve it.