WINDSOR, Conn., Nov. 7, 2011 — While 95 percent of the multi-line companies represented in the survey offer life insurance, only 48 percent of consumers are actually aware that they can buy life insurance from them; additionally 87 percent of consumers surveyed said they have never spoken to their multi-line agent about life insurance.
“There is an obvious disconnect. In past surveys, 90 percent of LIMRA’s multi-line exclusive agent (MLEA) panel said they always let clients know they can help them with their ‘auto, home, and life insurance needs’ during the first conversation or meeting,” said Laura Murach, assistant director, LIMRA Distribution Research. “Perhaps it’s not that sales agents aren’t bringing up the topic of life insurance; but rather, the conversation is not resonating with potential clients enough to respond — or even to remember the conversation.”
The report, The Insurance Cross-Purchase Survey, examined the results of a survey of more than 4,000 people to understand their purchase behaviors and why people do or do not buy life insurance from their multi-line company.
The study found that while 63 percent of participants own life insurance, only 19 percent own it with the same company as their automobile insurance. The study also revealed that almost 1 in 3 people who buy life insurance from a company other than their auto insurance company do so because they are not aware their multi-line company offers the product.
Cross selling life insurance to property-casualty customers has long been a part of the multi-line strategy. Yet despite companies having the products, capabilities, and access, multi-line household penetration rates remain relatively low. In fact, in a separate study, LIMRA research shows that only eight percent of 64.3 million households from 13 multiple-line exclusive-agent (MLEA) companies own automobile, homeowners and life and/or financial products with the same company.
Fifty-three percent of consumers surveyed said price contributed most to their decision to purchase auto insurance. However, only14 percent say price is the single factor that contributed to their purchase decision. Aside from price, people buy life insurance with their multi-line company mainly because the products are well-suited to their needs (47 percent) and they trust the company’s reputation (44 percent).
How important is company reputation when it comes to purchasing insurance?
It’s one of the most influential factors in a consumer’s purchase decision — whether they buy auto or life insurance. In fact, 61 percent of respondents who purchased life insurance from their multi-line company (19 percent of total) did so because they trusted the company’s reputation; 56 percent cite their trust in their agent; 48 percent say the price was right and 41 percent mentioned that they bought the product because they considered it was the best. Regardless of age, people say company reputation is more important to them when purchasing life insurance than it is when purchasing auto insurance.
Timing is another factor the survey uncovered. Of the people who purchased life insurance from their multi-line company, 41 percent discussed it when they first met with the agent. But only 21 percent of those surveyed said their agent brought up the topic of life insurance. In fact, nearly two thirds of those surveyed whose life insurance is with their multi-line company initiated the conversation about life insurance with their agent. Most consumers said a change in their personal situation spurred the discussion.
“It’s clear that consumers are open to the idea of buying life insurance from their multi-line carrier,” noted Murach. “Insurers just need to remind their producers of the importance of talking to their clients early in the process and making them aware of the risk products available to them.”
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.