New LIMRA and EY study examines how social media will transform client engagement
A consumer’s lack of understanding about life insurance often prevents them from purchasing coverage. According to the 2022 Insurance Barometer Study, more than 1 in 5 uninsured Americans say they haven’t purchased coverage because they do not know what to buy or how much they need. Overall, just 1 in 3 Americans believe they are very knowledgeable about life insurance, yet most don’t work with a financial professional.
Educating consumers requires a multi-pronged communication strategy with the right mix of phone calls, email, seminars, in-person meetings, and social media. In particular, a strong social media presence could enable financial professionals to educate consumers about life insurance while simultaneously growing their client base.
The more traditional channels (phone calls, emails, seminars, etc.) are still the preferred communication methods today. Currently, half of financial professionals (52%) do not use social media to communicate with prospects, yet 63% say they plan to use it more regularly in the next three years, according to the new report, Reimagining Growth: The LIMRA-EY Experienced Financial Professional Study.
One of the biggest challenges to the adoption of social media for financial professionals is their lack of confidence that it will help. Today, 60% of financial professionals believe their social media efforts are ineffective, but they expect this to improve over time. In fact, financial professionals expect to acquire 20% of their clients from social media in the next three years, more than doubling the current rate of 8%.
Social media can be a powerful tool for helping clients better understand life insurance. Four in 10 insurance-focused financial professionals say a client’s biggest misunderstanding is how insurance products fit in their broader financial plan. Twenty-seven percent of investment-focused financial professionals say consumers misunderstand living benefit riders (including long-term care).
Through intentional social media use, financial professionals can offer content that explains life insurance’s complexities in a simple way. Direct messaging features can allow illustration of how these products work specifically for an individual consumer’s needs.
Carriers play a role here, too. Providing compelling social media content and technology support to the financial professionals working with them can strengthen their partnership. Nearly three quarters (73%) of financial professionals say content and technological support is important to digital selling.
Financial professionals already see the opportunity social media provides for engaging consumers. Social media usage for prospecting clients more than tripled in a decade — from 13% in 2012 to 48% in 2022. Financial professionals who invested in communication technology and specialized social media talent saw even more success in client acquisition.
Currently, 53% of consumers use social media to research information on financial products and services. The top three social media channels consumers use include Facebook (62%), YouTube (58%), and Instagram (36%). These channels are particularly popular among Millennial, Generation X and Generation Z consumers.
As more consumers rely on digital sources to get financial information, a multi-pronged approach to communication — including social media —can support financial professionals in helping their clients become financially secure.