Auto insurance is legally required for almost every U.S. driver. Yet many auto insurance customers aren’t aware that the same companies that provide their auto insurance also offer life insurance. New LIMRA research highlights the untapped potential for multi-line carriers to cross-sell life insurance to both prospective and existing customers. Where available, less than half of auto insurance policyholders (45%) are aware that their auto insurer offers life insurance, and even fewer (31%) recall discussing it with the company or an agent.
According to Cross-Selling Life: The Consumer Perspective, 43% of those with car insurance believe their auto insurance company should talk to them about their life insurance needs. This increases to nearly 7 in 10 multi-line customers — those who have auto, home, and life insurance with the same company. Given their personal experience, multi-line customers are the most convinced of auto agents’ competencies when it comes to the topic of life insurance: 64% agree that auto agents are knowledgeable about life insurance compared to just 24% of customers who don’t remember ever discussing the product.
There is a benefit for companies and agents to expand their relationship with their auto insurance clients: loyalty. Among survey respondents, multi-line customers are much more likely to have been with the same auto insurer for more than five years, compared to respondents who only have an auto insurance policy with the carrier.
At the same time, the results suggest that multi-line customers are not just loyal because they also own life insurance, but they have a “stickier" nature to begin with. These customers are different from those who only have auto or property and casualty insurance. Demographically, multi-line customers tend to be younger, wealthier, and more educated, often with children under 18, suggesting a potential need for family-focused coverage such as life insurance. They exhibit self-sufficiency, relying on their own knowledge and judgment for financial decisions, and value the expertise and convenience of interacting with financial professionals.
In general, the perceived cost of life insurance is the number one obstacle that keeps consumers from getting the coverage they say they need. In the 2023 Insurance Barometer Study, nearly half (46%) of all uninsured consumers say a major reason they haven’t purchased coverage is that they believe life insurance is too expensive. LIMRA’s research suggests that price could be an easier hurdle to overcome when cross-selling life insurance to those with auto insurance. According to the findings, multi-line customers are more likely to value a company’s reputation, product offerings, and agent accessibility.
Awareness is the first step to finding future multi-line customers
“There are more than 56,000 multi-line agents working in the U.S. today. While life insurance represents just 14% of their business on average, this new research indicates there is a significant opportunity for these agents to expand their business and help the millions of Americans who say they need (or need more) life insurance,” said Donna Chaffin, associate research director, LIMRA Distribution Research.
Yet, LIMRA’s study suggests most of the time, multi-line agents and carriers aren’t having conversations about life insurance with their customers. Seven in 10 consumers don’t recall their auto agent or insurer ever bringing up life insurance. Opening up the conversation about life insurance could not only drive business growth but also help more consumers get the coverage they need to protect their loved ones’ future financial security.